TaxTMI 
TaxTMI 
2014 (7) TMI 1131
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....n 143(1)(a) on March 31, 1998. Subsequently, the case was selected for scrutiny and the scrutiny assessment was completed on a total income of Rs. 50,01,050 on March 31, 1999. The assessment order, demand notice and challan were served on the assessee on April 1, 1999 and the demand became due on May 1, 1999. Against this, the assessee went in appeal before the Commissioner of Income-tax (Appeals) and the Commissioner of Income-tax (Appeals) deleted the additions made in the order under section 143(3), thereby restoring the order under section 143(1)(a). The total income as per 143(1)(a)order was Rs. 1,99,100 and the tax demanded was Rs. 1,44,730. On giving effect to the order of the Commissioner of Income-tax (Appeals) on January 25, 2000, the demand payable was determined at Rs. 66,548. The assessee paid this amount in instalments on various dates from September 20, 2000 to March 22, 2007. 4. The Department went in appeal before the Tribunal against the order of the Commissioner of Income-tax (Appeals), and the Tribunal vide order dated December 19, 2008 partly restored the order of the Assessing Officer under section 143(3) of the Act. On giving effect to the order of the Tri....
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....ate on the unpaid amount and any variation in the amount of the demand favourable to the assessee which was directed by any of the appellate authorities in interregnum has no effect on liability of the assessee to pay interest. In this context, para 17 of the decision in the case of Girnar Investment Ltd. v. CIT [2012] 340 ITR 529 (Delhi) is relevant which is extracted below (page 538) : "17. In Vikrant Tyres Ltd. v. First ITO [2001] 247 ITR 821 (SC) the Supreme Court was considering the correctness of charging interest under section 220(2) in the following facts. There, the assessee had paid the entire demand of tax pursuant to the assessment. He however preferred an appeal to the first appellate authority who decided the appeal in his favour. The Assessing Officer refunded the tax to the assessee. The Revenue carried the matter further appeal and ultimately the matter reached the High Court on a reference. The High Court ruled in favour of the Revenue and the assessment was restored. The assessee paid the taxes as demanded by the Assessing Officer after the judgment of the High Court. The question b....
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....e reversal of the order of the first appellate authority by the Tribunal. This judgment was affirmed by the Division Bench of the Kerala High Court in ITO v. A. V. Thomas and Co. [1986] 160 ITR 818 (Ker). 8.3. In K. P. Abdul Kareem Hajee v. ITO [1983] 141 ITR 120 (Ker), it was again held by a learned single judge of the Kerala High Court that an order of a judicial or quasi-judicial authority was not final for the purpose of res judicata during the time allowed for filing the appeal or during the pendency of the appeal. The order, it was held, although not final, is pro visionally executable subject to restoration. Where the order of assessment was taken up in appeal and the first appellate authority gave relief which was however reversed by the Tribunal on appeal by the Revenue, and the assessment order was restored, the assessment order 'is deemed to have operated in full vigour to make the petitioner liable in law by reason of the Tribunal's affirmative order'. The single judge accordingly held that the assessee was liable to pay interest under section 220(2) right from the date of the assessment order. 8.4. In a matter which arose under section 32(2) of the Gi....
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....o the opinion of the High Court. Pursuant to the order of the Tribunal, the Assessing Officer passed consequential orders calling upon the assessee to pay up the penalty with interest accrued thereon under section 220(2). The assessee challenged the order before the High Court by filing writ petition on the ground that fresh demand notices were not issued by the Assessing Officer for recovery of the penalty and interest. The High Court dismissed the petition holding (a) that the legal effect of the later order of the Tribunal (to give effect to the opinion expressed by the High Court on a reference) was that the earlier notice of demand stood revived and became valid, legal and enforceable against the assessee and there was no need to issue fresh demand notices, and (b) that in view of the validating Act the original notice of demand issued by the Assessing Officer continued to be valid and operative against the assessee. It was noted by the High Court that the assessee had not paid the penalty till February 15, 1979. 9. In the present case, the assessment under section 143(3) of the Act was completed on March 31, 1999 and the demand notice was issued. The said demand reached fi....