1985 (3) TMI 117

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....o the consolidated order of the Commissioner (Appeals) dated 7-5-1983, relating to the assessment years 1972-73 and 1973-74. In the appeals of the revenue, common grievance projected before us is that the learned Commissioner (Appeals) erred in allowing relief on account of interest charged under section 220(2) of the Income-tax Act, 1961 (' the Act ') when there is no provision under the Act for ....

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...., as against Rs. 2,050, actually allowed by the Commissioner (Appeals). Similarly, the figure for the assessment year 1973-74 would need verification. Therefore, we are not acting on the figures but on the principles involved in the appeals. The figures will be automatically covered by the decision taken by us. 3. Section 220 falls under Chapter XVII, dealing with the collection and recovery of....

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....d in calculating interest. 5. Under rule 118, the ITO has a mandate from the Legislature to calculate interest payable under sub-section (2) of section 220 at the end of each financial year if the amount of tax, penalty or other sum in respect of which such interest is payable, has not been paid in full before the end of any such financial year and issue a notice of demand under section 156, ac....

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....sal of the orders of the authorities below, we find that the ITO failed to calculate and issue a notice under section 156 for each of the financial year about the amount of interest payable by the assessee. In the order that came up in appeal before the learned Commissioner (Appeals), he calculated interest for the entire period under rule 119 because calculation of interest in each financial year....