Interest under Income Tax Act charged from date of revised order, not original assessment. Appeal dismissed.

The High Court affirmed that interest under Section 220(2) of the Income Tax Act should be charged from the date of the revised order under Section 154, not from the original Assessment Order. The court referenced a Supreme Court decision and concluded that no substantial question of law arose for consideration. Consequently, the appeal was dismissed, upholding the charging of interest as per the revised order.

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Issues:
1. Rectification of Assessment Order under Section 154 of the Income Tax Act.
2. Charging of interest under Section 220(2) from the date of the original Assessment Order versus the revised order under Section 154.

Issue 1: Rectification of Assessment Order under Section 154:
For the Assessment year 1989-90, the assessee filed an application under Section 154 of the Income Tax Act, claiming a mistake in the Assessment Order passed on 26.3.1992. The application was allowed, leading to a Revised Assessment Order dated 15.9.1994, resulting in a nil assessment and issuance of refund vouchers totaling &8377; 2,48,33266/- and &8377; 76,04,798. Subsequently, another notice under Section 154 was issued on 16.10.1995, followed by a rectification order on 1.12.1995, leading to a fresh revised notice of demand and Challan. The applicant challenged the charging of interest from 1992, which was dismissed in the first appeal but allowed in the Second Appeal before the Tribunal.

Issue 2: Charging of interest under Section 220(2):
The Department appealed under Section 260(A) of the Income Tax Act, arguing that interest under Section 220(2) should be charged from the date of the original Assessment Order dated 26.3.1992, not from the revised order under Section 154 dated 1.12.1995. The High Court, after considering the arguments, referred to a Supreme Court decision in Vikrant Tyres Limited Vs. I.T.O.,247 I.T.R. 821. The Supreme Court held that interest could only be levied if there was a default in payment within the stipulated period. In the present case, as the original demand was satisfied after the first Assessment Order and rectification, interest could only be imposed from the date of the subsequent order on 1.12.1995.

In conclusion, the High Court found that as per the Supreme Court decision and the facts of the case, no substantial question of law arose for consideration. Therefore, the appeal was dismissed, affirming that interest under Section 220(2) was chargeable from the date of the revised order under Section 154, not from the original Assessment Order.

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