TMI Blog2020 (5) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the interest u/s 234D shall be levied from the date of grant of refund to the date of regular assessment order passed u/s 143(3) - Where it is found that no refund has been granted pursuant to intimation u/s 143(1), the assessee shall be granted relief from such levy of interest u/s 234D and consequentially, levy of interest u/s 220(2) will also undergo a change and the Assessing officer is directed to recompute the interest u/s 220(2) after granting credit for amount paid towards the outstanding taxes instead of interest u/s 234D as done correctly. - ITA No. 15 & 16/JP/2019 - - - Dated:- 15-4-2020 - Shri Sandeep Gosain, JM And Shri Vikram Singh Yadav, AM For the Assessee : Sh. S L Poddar (Advocate) For the Revenue : Sh. K. C. Gupta (JCIT) ORDER PER: VIKRAM SINGH YADAV, A.M These are two appeals filed by the assessee against the order of ld. CIT(A), Ajmer dated 13.11.2018 for A.Y 2004-05 and 2006-07 respectively. Since the common issues are involved, both these appeals were heard together and are being disposed off by this consolidated order. ITA No. 15/JP/2019 2. Firstly, we take up the assessee appeal in ITA No. 15/JP/2019 for A.Y 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. 4. Regarding charging of interest u/s 234D, it was stated by the AO that interest has been charged for the period commencing from the date of grant of refund to the date of regular assessment and the application so filed by the assessee was not found acceptable and disposed off vide order dated 21.11.2017 which on appeal has been confirmed by the ld. CIT(A). Against the said finding, the assessee is now in appeal before us. 5. During the course of hearing, the ld. AR submitted that the first issue involved is whether the provisions of section 220(2) as amended by the Finance Act, 2014 are applicable in the instant case or not. In this regard, it was submitted that the Hon ble Rajasthan High Court has passed the order u/s 260A(5) of the Act and the proviso inserted in section 220(2) has no reference to order passed u/s 260A and the relevant provisions reads as under: Provided that, where as a result of an order under section 154, or section 155, or section 250, or section 254, or section 260, or section 262, or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount on which interest was payable under the section had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nehalf per cent on the whole or the excess amount so refunded, for every month or part of a month comprised in the period from the date of grant of refund to the date of such regular assessment. (2) Where, as a result of an order under section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount of refund granted under sub-section (1) of section 143 is held to be correctly allowed, either in whole or in part, as the case may be, then, the interest chargeable, if any, under sub-section (1) shall be reduced accordingly. Explanation 1.-Where, in relation to an assessment year, an assessment is made for the first time under section 147 or section 153A, the assessment so made shall be regarded as a regular assessment for the purposes of this section. Explanation 2.-For the removal of doubts, it is hereby declared that the provisions of this section shall also apply to an assessment year commencing before the 1st day of June, 2003 if the proceedings in respect of such assessment year is completed after the said date. 8. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. Therefore, the contention of the ld AR that the proviso to section 220(2) talks about order passed under section 260 and not under section 260A cannot be accepted. 11. As per the order of the Hon ble Rajasthan High Court in DB Appeal No. 932/2008 dated 26.05.2017, the appeal of the Revenue has been allowed and the order passed by Assessing officer u/s 143(3) dated 27.12.2006 is restored and consequent original demand notice issued u/s 156 has been revived. The decision of the Hon ble Supreme Court in case of Vikrant Tyres (supra) cannot come to the rescue of the assessee as an amendment has been brought in by the Finance Act, 2014 by way of insertion of sub-section (1A) to section 220 wherein it has been provided that where any notice of demand has been served upon an assessee and any appeal or other proceeding, as the case may be, is filed or initiated in respect of the amount specified in the said notice of demand, then such demand shall be deemed to be valid till the disposal of appeal by the last appellate authority or disposal of proceedings, as the case may be and such notice of demand shall have effect as provided in section 3 of the Taxation Laws (Continuation a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 220(2) shall be levied. 13. Now, coming to levy of interest u/s 234D, we agree with the contention of the ld AR that where no refund has been granted u/s 143(1) to the assessee, the question of charging of interest u/s 234D doesn t arise for consideration. Similarly, we also agree with the contention of the ld AR that such interest can be charged for the period from the date of grant of refund to the date of such regular assessment i.e, 27.12.2006 in the present case. 14. In light of aforesaid discussions, the matter is accordingly set-aside to the file of the Assessing officer for purposes of verifying whether any refund has been granted pursuant to intimation u/s 143(1) and only in a scenario where such refund has been granted, the interest u/s 234D shall be levied from the date of grant of refund to the date of regular assessment order passed u/s 143(3) of the Act. Where it is found that no refund has been granted pursuant to intimation u/s 143(1), the assessee shall be granted relief from such levy of interest u/s 234D and consequentially, levy of interest u/s 220(2) will also undergo a change as discussed in para 11 above and the Assessing officer is directed to recomput ..... X X X X Extracts X X X X X X X X Extracts X X X X
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