2011 (11) TMI 118

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.... for the respondent. ORAL JUDGMENT (PER J.D. DEVADHAR, J.) 1. Whether the ITAT was justified in holding that the assesse was liable to pay interest u/s.220(2) of the Income Tax Act, 1961 ('the Act' for short) after thirty days from the service of the fresh demand notice dated 24/12/2006 pursuant to the fresh assessment order passed under Section 143(3) of the Act, is the question raised in t....

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....lakhs and raised a demand of Rs.22.02 lakhs. The assessee paid the amount beyond thirty days from the service of the demand notice dated 24/12/2006. The assessing officer held that the assessee was liable to pay interest under Section 220(2) of the Act after thirty days from the service of the original demand notice dated 28/2/1997. Challenging the aforesaid order, the assessee filed an appeal bef....

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....above contention. Under Section 156 of the Act, service of the demand notice is mandatory. Section 220(2) of the Act provides that if the amount specified in any notice of demand under Section 156 is not paid within the period prescribed under sub-section (1) of Section 220, then, the assessee shall be liable to pay simple interest at the rate prescribed therein. 7) In the present case, it is n....

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....ion of demanding interest for the period prior to 24/12/2006 does not arise at all. Neither the assessment order dated 24/12/2006 nor the demand notice dated 24/12/2006 required the assessee to pay interest after thirty days from the date of service of the original demand notice dated 28/2/1997. Since the demand itself was crystallized under the assessment order dated 24/12/2006 and the assessee u....