1992 (1) TMI 25

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....ing the tax payable at Rs. 10,83,746. The notice of demand under section 156 of the Act was issued and served on September 27, 1977. The Commissioner of Income-tax (Appeals), vide his order No. CIT(A)IV/VII-119/77-78, dated October 31, 1979, reduced the total income to Rs. 2,04,40,553 and it resulted in a refund of Rs. 18,05,379. The Income-tax Appellate Tribunal, Ahmedabad Bench 'A', vide its order No. I.T.A. Nos. 54 & 56 Ahd/1980, dated April 1, 1982, redetermined the total income at Rs. 2,18,58,538 and the tax payable at Rs. 5,65,045. Simple interest at 12% per annum is levied in terms of section 220(2) read with rule 118(1). The interest payable under section 220(2) is computed with reference to the due date reckoned from the origina....

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....ice of demand (exhibit H) dated October 12, 1982, was issued. The petitioner paid the said amount also within time. The aforesaid facts are not denied by the respondent. In view of the above undenied facts, it is apparent that, at no point of time, the petitioner has failed to comply with the notice of demand issued under section 156 of the Income-tax Act. In spite of the aforesaid facts, the respondent passed the impugned order (exhibit J) dated January 5, 1986, under section 220(2) of the Income-tax Act, demanding interest of Rs. 5,10,373 on Rs. 6,55,048 at the rate of 12 1/2% per annum. Learned counsel for the petitioner submitted that the aforesaid impugned order is, on the face of it, illegal and requires to be quashed and set aside. ....