1994 (5) TMI 14

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....livered by M. JAGANNADHA RAO C. J.-This petition is filed by the petitioner for issuing a writ of certiorari quashing the charging of interest in a sum of Rs. 11,83,631 under section 220(2) of the Income-tax Act, 1961, with effect from May 1, 1992, through demand notice dated November 13, 1992, which was issued pursuant to the rectification order under section 154 of the Income-tax Act for the ....

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....12, 1992, determining the taxable income at Rs. 1,97,39,599 and thereby raised a demand in the sum of Rs. 1,24,56,311 which comprised the following items: Rs. (a) Tax including surcharge 56,41,956 (b) Interest under section 234B 65,31,738 (c) Interest under section 220(2) 11,83,631 Total 1,24,56,311 In this writ petition the levy of interest of Rs. 11,83,631 under section 220(2) ....

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....ovember 18, 1992. Though the demand notice based on the order of rectification was served on November 18, 1992, Rs. 11,83,631 the interest demanded under section 220(2) proceeds on the assumption that the petitioner is liable to pay interest on the amount now determined in the rectification order and as if it was not paid earlier. Learned counsel contends that section 220(2) gives powers to the....

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....red by the rectification order, on issue of a demand for the amount assessed. The rectification order cannot include interest under section 220(2) payable on the tax additionally assessed in the rectification order unless there is a demand for the amount so additionally assessed. This position is also clear from section 154. Sub-section (4) of section 154 of the Income-tax Act states that where....