2010 (6) TMI 768

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....COME TAX   O R D E R   JUDGMENT Ramachandran Nair, J.   1.Appeal is filed against the order of the Tribunal holding that appellant is liable to pay interest under Section 220(2) of the Income Tax Act for the entire period of default commencing from the date of service of original demand till payment after appeal was disposed of by the Tribunal.   2.We have heard ....

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.... appellate order was vacated and the original assessment and the original demand were restored. Consequently, revised order was issued vide Ext.P7 by which the department has charged interest under Section 220 (2) of the I.T.Act for the entire period of default on the sustained demand, that is, from the date of the original demand till date of re- computation of liability. Assessee did not succeed....

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.... 1964, hereinafter referred to as the "Act" and contended that interest is payable on the entire balance amount due from original date of default till date of making payment.   5.We have already noticed that, in the first place, both the decisions relied on are cases where full tax amount had been paid in terms of the demand by the assessee and later, after first appellate order, the amoun....

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....l survive, the provisions of the said Act do not tally with substantive provisions on interest, which are covered only under Section 220(2) of the Act. Default is a necessary pre- condition for demand of interest under Section 220(2) and there can be no dispute that, after grant of refund, assessee cannot be held to be a defaulter, no matter, without issuing a fresh notice of demand, assessee coul....