1999 (8) TMI 37

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ne-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." It is submitted that the interest has already been levied while creating the demand under sections 139(8) and 217 of the Act. In respect of the amount specified in the demand notice which is inclusive of the tax, interest and penalty liability of further interest to the extent that it is on the interest element is confiscatory in nature. Reliance is placed on the judgment given by the Madras High Court in the case reported in A. M. Sali Maricar v. ITO [1973] 90 ITR 116, where the provisions of section 140A(1)/(3) wer....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nterest is payable on the total liability and the amount found payable by way of quantification of liability of an assessee in respect of "tax", "interest" and "penalty". A contention was raised in Gujarat State Fertilisers Co. Ltd. v. ITO [19831 142 ITR 787 (Guj), that the provisions of section 220(2) are manifestly unreasonable and arbitrary exhibiting unfairness and naked despotism and are therefore violative of article 14 of the Constitution. It was pointed out by the Gujarat High Court that the order passed levying the interest is not unreasonable but is in fact blended with equity. Section 220 refers to any amount payable in accordance with the notice of demand under section 156. Section 221(1) provides for levy of penalty when ....