TMI Blog1999 (8) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... d commencing from the day immediately following the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid." It is submitted that the interest has already been levied while creating the demand under sections 139(8) and 217 of the Act. In respect of the amount specified in the demand notice which is inclusive of the tax, interest and penalty liability of further interest to the extent that it is on the interest element is confiscatory in nature. Reliance is placed on the judgment given by the Madras High Court in the case reported in A. M. Sali Maricar v. ITO [1973] 90 ITR 116, where the provisions of section 140A(1)/(3) were held violative of articles 14 and 19(1)(g) of the Constitution. It is sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of quantification of liability of an assessee in respect of "tax", "interest" and "penalty". A contention was raised in Gujarat State Fertilisers Co. Ltd. v. ITO [19831 142 ITR 787 (Guj), that the provisions of section 220(2) are manifestly unreasonable and arbitrary exhibiting unfairness and naked despotism and are therefore violative of article 14 of the Constitution. It was pointed out by the Gujarat High Court that the order passed levying the interest is not unreasonable but is in fact blended with equity. Section 220 refers to any amount payable in accordance with the notice of demand under section 156. Section 221(1) provides for levy of penalty when the assessee is in default or is deemed to be in default in making the payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y such amount. The provisions of section 40(1) of the Agricultural Income-tax Act, 1950, fixing the time for payment of tax assessed and making the amount payable by issue of demand notice were upheld in Smt. Achamma Kuriakose v. State of Kerala [1988] 171 ITR 494 (Ker). If Parliament has competence to levy the interest for non-payment or late payment of tax, then, after the liability is determined if certain amount of interest is payable, the power to recover and make a provision for levy of interest for non-payment of such amount is ancillary and incidental to the main power for levy of tax. The contention that the provisions are violative of articles 14 and 19(1)(g) has no substance. The writ petition is accordingly dismissed. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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