Appeal allowed: Interest charged from fresh order date. Legal principles upheld.

The Tribunal allowed the assessee's appeal, ruling that interest under section 220(2) of the Income Tax Act should be charged from the date of the fresh assessment order, not the original assessment order. This decision was based on legal principles and precedents, including a previous decision in the assessee's case for other assessment years. The appeals were allowed, overturning the Assessing Officer's decision to levy interest from the original assessment order date.

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Issues:
Levy of interest under section 220(2) of the Income Tax Act.

Analysis:
The appeals were filed by the assessee against the Commissioner of Income Tax (Appeals) order confirming the levy of interest under section 220(2) of the Act for the assessment years 1995-96 and 1997-98. The initial assessments disallowed expenditure on machinery replacement, which was later challenged by the assessee. The High Court held that the expenditure was revenue in nature, leading to the Supreme Court remitting the matter back to the Commissioner of Income Tax (Appeals) for reconsideration. Subsequently, the Assessing Officer levied interest under section 220(2) from the date of the original assessment order, which was contested by the assessee. The issue revolved around the correct starting point for charging interest under section 220(2) - whether from the original assessment order or the fresh assessment order.

The assessee argued, citing a previous decision in their own case for the assessment years 1994-95 and 1999-2000, that interest under section 220(2) should be charged from the fresh assessment order date, not the original assessment order date. The Departmental Representative, on the other hand, supported charging interest from the original assessment order date. The Tribunal referred to the previous decision in the assessee's case, where it was held that interest under section 220(2) should be charged from the date of the fresh assessment order. This decision was based on the principle that when an assessment order is set aside and a fresh assessment order is passed, interest should be charged from the date of the fresh order. The Tribunal also cited relevant legal precedents and circulars to support this interpretation.

Ultimately, the Tribunal upheld the assessee's appeal, following the precedent set in their previous case and the legal principles governing the charging of interest under section 220(2). The appeals were allowed, and it was decided that interest under section 220(2) should be charged from the date of the fresh assessment order, not the original assessment order.

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