TaxTMI 
TaxTMI 
1982 (7) TMI 105
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....within this time specified, the assessee shall be liable to simple interest at 12 per cent per annum from the day commencing after the end of the period as mentioned in sub-section (1). There is also a provision of consequential reduction of interest if the main demand is also reduced. The assessee moved an application under section 154 of the Act on 16-7-1980 objecting to the charging of interest under section 220(2). According to the assessee, interest could not be charged as there had been a search and the jewellery belonging to the assessee's wife had been retained under the provisions of section 132(5) of the Act. The assessee had further claimed that the ITO should have allowed interest to the assessee as the value of the jewellery re....
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.... Such interest shall run from the date immediately following the expiry of the period or six months from the date of the order under sub-section (5) of section 132 to the date of the regular assessment or reassessment referred to in clause (i) of sub-section (1) or, as the case may be, to the date of last of such assessments or reassessments. " The ITO held that the interest had to be paid only in respect of money retained or the assets sold for satisfying the demand. He, therefore, considered the application to be misconceived. The claim of the assessee was, therefore, rejected. 3. Before the AAC the assessee relied on the brochure issued by the Directorate of Inspection (RSP), namely, 'Tax Payers Information Series' interest payment und....
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....the assessee. In the present case, no money was retained and none of the assets were sold. On the face of the section, therefore, no interest is due to the assessee. It may also be mentioned that as far as the question of allowance of interest under section 132B(4) is concerned, it cannot arise in a rectification proceedings against the order passed under section 220(2). The right of the assessee to receive interest under section 132B(4) is a separate right and the assessee can proceed to claim that right independently. However, for this reason, the order under section 220(2) cannot be considered to be suffering from any mistake. The contention of the assessee that the assets retained should be treated as money would start a controversy and....
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....nt relating to the undisclosed income, or, as the case may be, to the date of the last of such assessments or reassessments. No interest is payable in relation to assets, other than money, which are not sold by the Income-tax Officer. The liabilities covered under this section are not only for tax, but also for any penalty and interest payable. " Thus, it is clear that the matter could not be resolved under the provisions of section 154 by way of rectification of order under section 220(2). 6. Before we part with the case, we would like to make a reference to the brochure issued by the Directorate of Inspection. The language in the brochure does give an impression that interest was allowable on excess value of the assets over the liabilit....