2026 (3) TMI 803

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....d CIT(A)"], which in turn arose from the order passed under section 154 of the Act, for the assessment year 2021-22. 2. In this appeal, the assessee has raised the following grounds: - "1. The Ld. CIT (Appeals) on the facts and circumstances of the case and in law has erred in upholding interest u/s 220 of the Income Tax Act, 1961, when the demand has crystalized only after the order u/s 154 has been passed on 13.05.2025 2. The Ld. CIT (Appeals) on the facts and circumstances of the case and in law has erred in partially accepting the charge of interest under Section 234C by directing the AO to compute interest u/s 234C on the basis of tax due on returned income." 3. During the hearing, the learned Authorised Represe....

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....ction 220(2) of the Act at Rs. 1,01,09,550/- 6. From the perusal of the record, we find that no breakup of the computation of interest levied under section 220(2) of the Act was provided to the assessee along with the order passed under section 154 of the Act. 7. During the hearing, the learned AR submitted that since the assessee's income has been reduced from Rs. 9,44,59,940/- to Rs. 7,71,35,481/-, the interest under section 220(2) of the Act should be correspondingly reduced. The learned AR further submitted that the said interest under section 220(2) of the Act also needs to be computed from the date of passing of the rectification order under section 154 of the Act and not from the date of processing of the return vide intimation....

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....terest under section 220(2) of the Act should be computed from the date of the rectification order passed on 13.05.2025 instead of from the date of intimation issued under section 143(1) of the Act. The various decisions relied upon by the learned AR, during the hearing, pertain to cases wherein the original assessment order itself was set aside, and therefore, in such circumstances, the Hon'ble Courts directed that the interest under section 220(2) of the Act should be computed from the date of the fresh assessment order. However, in the present case, such are not the facts as the assessed income vide intimation issued under section 143(1) of the Act has only been reduced vide order passed under section 154 of the Act. Therefore, we are of....