TMI Blog1992 (1) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... demand under section 156 of the Act was issued and served on September 27, 1977. The Commissioner of Income-tax (Appeals), vide his order No. CIT(A)IV/VII-119/77-78, dated October 31, 1979, reduced the total income to Rs. 2,04,40,553 and it resulted in a refund of Rs. 18,05,379. The Income-tax Appellate Tribunal, Ahmedabad Bench 'A', vide its order No. I.T.A. Nos. 54 56 Ahd/1980, dated April 1, 1982, redetermined the total income at Rs. 2,18,58,538 and the tax payable at Rs. 5,65,045. Simple interest at 12% per annum is levied in terms of section 220(2) read with rule 118(1). The interest payable under section 220(2) is computed with reference to the due date reckoned from the original demand notice (i.e., November 1, 1977) and with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 982, was issued. The petitioner paid the said amount also within time. The aforesaid facts are not denied by the respondent. In view of the above undenied facts, it is apparent that, at no point of time, the petitioner has failed to comply with the notice of demand issued under section 156 of the Income-tax Act. In spite of the aforesaid facts, the respondent passed the impugned order (exhibit J) dated January 5, 1986, under section 220(2) of the Income-tax Act, demanding interest of Rs. 5,10,373 on Rs. 6,55,048 at the rate of 12 1/2% per annum. Learned counsel for the petitioner submitted that the aforesaid impugned order is, on the face of it, illegal and requires to be quashed and set aside. Considering the provisions of section 220, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A V. Thomas and Co. [1986] 160 ITR 818 and the decision of the Delhi High Court in the case of Bharat Commerce and Industries Ltd. v. Union of India [1991] 188 ITR 277. In the result, this special civil application is allowed. The order (exhibit) dated January 6, 1983, under section 220(2) of the Income-tax Act passed by the Income-tax Officer, Companies Circle VII, Ahmedabad, demanding interest of Rs. 5,10,378 from the petitioner is quashed and set aside. Rule is made absolute with no order as to costs. At the time of admission, this court has passed the following interim order : Rule expedited. Interim relief refused on the condition that in case the petitioner succeeds ultimately, the amount of Rs. 5,10,378 shall be refunded to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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