TaxTMI 
TaxTMI 
2018 (8) TMI 982
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....ed 15/09/1992 reducing the income of the assessee to Rs. 5,83,45,420/-. By order dated 05/11/1993 Assessing Officer further reduced the same to Rs. 5,60,33,906/-. Again on 26/12/1996 Learned Assessing Officer passed an order giving effect to the consolidated order dated 22/07/1996 passed by the Tribunal, reducing the income to Rs. 92,49,259/-. Again on 29/04/1997 Ld. Assessing Officer passed yet another order under section 154 of the Act further reducing income to Rs. 66,80,645/-. 3. While the matter stood thus, Ld. CIT(A) passed an order dated 07/06/2002 in appeal for the assessment year 1986-87 directing the Learned Assessing Officer to consider the allowability of excise duty payment of Rs. 88,80,914/- in the assessment year 1986-87, further observing that in case, the assessing officer decides to allow the deduction for this year, then he should withdraw the equivalent claim which has already been allowed in the subsequent assessment year, that is assessment year 1987-88. Pursuant to the said order, Learned Assessing Officer passed an order dated 15/09/2014 under section 250/143(3) of the Act for the assessment year 1986-87 and has allowed the deduction for payment of excise d....
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....epted by the 1st authority. 7. It is the argument of the Ld. DR that it is not the case of the assessee that they made any payment pursuant to the demand that was raised as per the order dated 29/03/1990 as such merely because they are was modified subsequently several times, the demand does not die. According to him proper course available to the assessee was that the assessee had to make the payment as per the income determined in assessment order under section 143(3) of the Act and then to claim refund, if any is generated, by the orders of the appellate authorities. It is not open for the assessee not to make any payment pursuant to the original demand and to rely upon the subsequent orders of the appellate authorities to avoid the interest which the assessee is liable under section 220 (2) of the Act. Ld. DR based the argument on the analogy that in case the assessee is entitled to refund, he is entitled to such refund with interest from the date of such entitlement, as such, on the same footing the assessee is also liable to interest from the date on which the demand had fallen due. 8. Per contra, Ld. AR submitted that in order to attract the provisions under section 220 (2....
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.... any appeal against the order dated 22/07/1996 passed by the Tribunal, and allowed it to become final. In such an event, we find it difficult to agree with the Ld. DR that the demand pursuant to the order dated 29/03/1990 was still alive and had anything to do with the order dated 15/09/2014 which is relevant for this proceedings, let alone whether in fact any demand was raised pursuant to the order dated 29/03/1990. Assessee vehemently disputes the raising of any such demand and there is nothing for us to show that any notice was issued rising such a demand. 10. It is an admitted fact that the demand of Rs. 44,40,457/-on the addition of Rs. 88,80,914/-relatable to the disallowance of excise duty emanates not from the order dated 29/03/1990 but as a consequence of the order dated 07/06/2002 passed by the Ld. CIT(A) in respect of the assessment year 1986-87 and the decision taken by the Learned Assessing Officer to allow the excise duty in the assessment year 1986-87 and consequently to a sum of Rs. 88,80,914/-. This demand of Rs. 44,40,457/- is not a part of the demand that would have arisen from the order dated 29/03/1990. The very basis for demand is the allowing the excise duty....
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....t,- A bare reading of this Section clearly indicates that if the assessee does not pay the amount demanded under a notice issued under Section 156 of the Act within the time stipulated under sub-section (1), the said assessee is liable to pay simple interest at one and one-half per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub- section (1) and ending with the day on which the amount is paid, and therefore the condition precedent under this Section is that there should be a demand notice and there should be a default to pay the amount so demanded within the time stipulated in the said notice. Applying this Section to the facts of the case, it is seen that immediately after the assessment was made for the relevant years, demand notices were issued under Section 156(1) of the Act and admittedly the appellant satisfied the said demands and nothing was due pursuant to the said demand notices. However, after the judgment of the appellate authority which went in favour of the assessee, the Revenue refunded the amount due as per the said order of the authority. Thereafter, when the matt....
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....substantive provision in this behalf. A Constitution Bench of this Court speaking through one of us (Hon. Bharucha, J.) in the case of V.V.S. Sugars v. Government of A.P. & Ors. [1999 (4) SCC 192] reiterated the proposition laid down in the India Carbon Ltd.s case (supra) in the following words : The Act in question is a taxing statute and, therefore, must be interpreted as it reads, with no additions and no substractions, on the ground of legislative intendment or otherwise. If we apply this principle in interpreting Section 220 of the Act, we find that the condition precedent for invoking the said Section is only if there is a default in payment of amount demanded under a notice by the Revenue within the time stipulated therein and if such a demand is not satisfied then Section 220(2) can be invoked. The High Court also fell in error in relying on Section 3 of the Validation Act to construe Section 220(2) in the manner in which it has done in the impugned judgment. Section 3 of the Validation Act, in our opinion, cannot be relied upon to construe the authority of the Revenue to demand interest under Section 220 of the Act. The said Section was enacted to cope up with a differe....
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....ry much alive to infuse breath into order dated 15/09/2014 to justify the chargeability of interest. As observed in the preceding paragraphs we do not find any evidence to show that any notice of demand in the prescribed form specifying the sum payable pursuant to the order dated 29/03/1990 was issued or that but for the order dated 07/06/2002 passed by the Ld. CIT(A) in respect of assessment year 1986-87 the so-called demand, if any, pursuant to the order dated 29/03/1990 was in force. Inasmuch as the new demand had arisen only to the orders of the Ld. CIT(A) passed on 07/06/2002 and the consequential action taken by the Learned Assessing Officer, we find it difficult to hold that the Learned Assessing Officer could charge interest on the newly arisen demand for any period prior to the order giving rise to such demand. 14. It is clear from the judgements relied upon by the assessee that insofar as the amount determined in the rectification order, the demand could be issued only after the rectification order was issued and , therefore, interest can be levied thereon only if there is non-payment of the amount covered by the rectification order, on issue of a demand for the amount a....