1985 (10) TMI 86

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....the Act, by separate but identical orders made on March 14, 1972, levied a sum of Rs. 6,000 as penalty for each year on the petitioner. Aggrieved by the said orders made by the Inspecting Assistant Commissioner, the petitioner filed appeals before the Income-tax Appellate Tribunal, Bangalore (" the Tribunal"), under section 250 of the Act which by its order dated March 7, 1973, allowed them and cancelled the penalties levied against him. Bat, on references made at the instance of the Revenue on that question, this court by its order made on April 21, 1978, in I.T.R.C. Nos. 70 and 71 of 1974 answered the same in its favour and against the petitioner. Agreeing with the said order of this court, the Tribunal then disposed of the appeals filed ....

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....ars in conformity with section 156 of the Act, the Income-tax Officer had issued notices of demand to the petitioner and that is not rightly disputed by Sri Shivaram. On the appeals filed by the petitioner, the Tribunal cancelled the penalties which necessarily meant the cancellation of demands issued by the Income-tax Officer also. But that success was a short-lived one as the Tribunal itself later in conformity with the orders of this court in I.T.R.C. Nos. 70 and 71 of 1974 dismissed them and confirmed the penalties and notices of demand issued by the Income-tax Officer. The legal effect of the latter order made by the Tribunal was that the earlier notices of demand stood revived and became valid, legal and enforceable against the pet....

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....ntion of Sri Shivaram either. On this very aspect, Sri Sarangan also placed before me Circular No. 334 dated April 3, 1982 [1982] 135 ITR 10 (St) issued by the Central Board of Direct Taxes and paragraph 2 of the same which is relevant for our purpose reads thus: "(ii) Where the assessment made originally by the Income-tax Officer is either varied or even set aside by one appellate authority but, on further appeal, the original order of the Income-tax Officer is restored either in part or wholly, the interest payable under section 220(2) will be computed with reference to the due date reckoned from the original demand notice and with reference to the tax finally determined. The fact that during an intervening period, there was no tax ....