Income Tax Appellate Tribunal - Delhi
Ito, New Delhi vs Sh. Anil Kumar Jain, Delhi on 13 November, 2017
In the Income-Tax Appellate Tribunal,
Delhi Bench 'C', New Delhi
Before : Shri H.S. Sidhu, Judicial Member And
Shri L.P. Sahu, Accountant Member
IT(SS)A No. 39/Del./2014
Block Period: 01.04.1987 to 17.12.1997
Income-tax Officer, vs. Anil Kumar Jain, 2503, Dharampura
Ward 29(2), New Delhi Chawri Bazar, Delhi.
(Appellant) PAN - AAGPJ 2562A
(Respondent)
Appellant by Shri Navin Chandra, CIT/DR
Respondent by None
Date of Hearing 10.10.2017
Date of Pronouncement 13.11.2017
ORDER
Per L.P. Sahu, A.M.:
This is an appeal filed by the Revenue against the order of ld. CIT(A)-
XXV, New Delhi dated 30.07.2014 for the block period mentioned above, on the following grounds:
"1. On the facts and circumstances of the case the Ld. CIT(A) was not justified in holding that interest u/s. 220(2) was chargeable after the demand notice was issued consequent upon the order of the Income Tax Settlement Commission.
2. On the facts and circumstances of the case the Ld. CIT(A) should have directed to charge interest from the date of original assessment till the order of ITSC.
3. The order of the CIT(A) should be modified and the order of the AO should be restored.IT(SS)A No. 39/Del./2014 2
4. On the facts and circumstances of the case the Ld. CIT(A) was not justified in examining an issue which was covered by the order of ITSC as provided u/s. 245-I of the I.T. Act and has thus gone beyond his powers."
2. The brief facts of the case are that consequent upon the search and seizure operations carried out on 11.12.1997, the assessee filed return of income in response to notice u/s. 158BC, declaring undisclosed income of Rs.2,16,132/- for the block period, which was enhanced to Rs.48,91,880/-
vide block assessment u/s. 158BC by the Assessing Officer. This assessment order travelled before the first appellate authority as well as before the Tribunal and ultimately, the Tribunal set aside the assessment passed u/s.
158 vide order dated 30.09.2005 in ITA Nos. 62/Del./01 and 81/Del./01.
During the pendency of proceedings before the AO in response to Tribunal order, the assessee carried the matter before the Settlement Commission, who determined the undisclosed income of the appellant for the block period at Rs.30,25,030/- vide order dated 25.02.2011. Pursuant to this order of Settlement Commission, the AO issued a demand notice u/s. 156 on 29.03.2011, mentioning a sum of Rs. 24,43,881/- payable by the assessee u/s.
220(2) of the Act as interest commencing from an uncertain period to February, 2011 and raising total demand of Rs.38,91,571/-. Having learnt that the total demand of Rs.38,91,571/- includes an amount of Rs.24,43,881/-
IT(SS)A No. 39/Del./2014 3charged on account of interest u/s. 220(2) from an unknown date to February, 2011, the assessee filed an application u/s. 154 before the AO on the averments that interest u/s. 220(2) could be charged only if the amount specified in the demand notice u/s. 156 is not paid within the period of 35 days from the date of its services. The AO did not concur with the averment of assessee and rejected the application u/s. 154 of the Act vide order dated 31.01.2014. In appeal against this order, the ld. CIT(A), after considering the elaborate submissions of the assessee and various case laws referred to in the impugned order, held that the assessee was not exigible to interest u/s.
220(2) of the Act from the date of the notice of demand raised in the first round of litigation which was nullified by the ITAT. Aggrieved by this order of ld. CIT(A), the Revenue is in appeal before the Tribunal.
3. We have heard the submissions of both the parties and have gone through the entire material available on record and we find no justification to discard the reasonable decision reached by the ld. CIT(A) on the issue vide impugned order. The findings reached by first appellate authority are reproduced herein below for ready reference :
"I have given my thoughtful consideration to the grounds of appeal, the submissions made by the appellant and the order passed u/s 154 of the Act. As regards the grounds of appeal nos. 3 to 6, the contention of the appellant opposing levy of interest from an unknown date to February. 2011 appears to be in order upon a consideration of the entire arguments of the appellant. The primary contention of IT(SS)A No. 39/Del./2014 4 the appellant that with the Hon'ble ITAT's order the earlier notice of demand was wiped out as the assessment order framed by the Ld.AO was set-aside with the direction to the AO to frame the assessment order afresh cannot be regarded as bereft of merit. It isan incontrovertible fact that when the appellant approached the Hon'ble Settlement Commission (for short. SC) there was no notice of demand in operation against the appellant which could be said to be legal, valid and enforceable against it. It can be gathered from the order of the Hon'ble SC the relevant part of whose order is quoted below:-
"2. In this group of cases a search and seizure operation was carried out on 11/12/1997. The block assessments were completed in all these cases and the Commission of Income Tax (Appeals) passed the appellate orders. These orders were set aside by the ITAT and the proceedings were pending before the Assessing Officer when the applicants came before The Settlement Commission."
On a perusal of the above part of the Hon'ble SC's order it was apparent that the proceedings were pending before the AO. Since the proceedings were pending there was no question of any demand against the appellant. By implication it meant that a fresh notice of demand was required to be issued after the conclusion of the proceedings before the Hon'ble SC.
Further, section 220(2) of the Act reads as under-
"If the amount specified in any notice of demand under section 156 is not paid within the period limited under sub-section (1), the assessee shall be liable to pay simple interest at 3 one and one- half per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub- section (1) and ending with the day on which the amount is paid:] Provided that where as a result of an order under section 154, or section 155, or section 250, or section 254, or section 260, or section 262, or section 264 5or an order of the Settlement Commission under sub- section (4) of section 245D], the amount on which interest was payable under this section had been reduced, the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded:] Provided further that in respect of any period commencing on or before the 31st day of March, 1989 , and ending after that dale, such interest shall, in respect of so much of such period as falls after that date, be calculated at the rate of one and one- half per cent for every month or part of a month.]"
On a perusal of the above section it is amply clear that interest u/s 220(2) of the Act is chargeable from the day immediately following the end of the period mentioned in Sub-section (1) and ending with the day on which the amount is paid. In the case at hand the notice u/s 156 was issued on 29/3/2011 as per which the appellant was statutorily required to pay the demand by 3rd April, 2011, the earlier demand notice etc based on the first order of the AO u/s 158BC of the Act, which was set aside by the Hon'ble ITAT, New Delhi, having been rendered nugatory. Thus, for the purposes IT(SS)A No. 39/Del./2014 5 of section 220(2) of the Act the demand notice issued subsequent to the order of the Hon'ble Settlement Commission was the valid, legal and enforceable notice.
Besides the above the proviso one to the section 220(2) of the Act, as quoted above, talks of reduction of the amount of interest payable under this section in case of any reduction in the amount on which interest was payable under this section and refund of the excess interest charged u/s 220(2) of the Act as a result inter-alia of the order of the Hon'ble SC u/s 245D of the Act. By implication it means that there must be an order of assessment in existence before the admission of an assessee's case to the Hon'ble SC. In the instant case there was no order in existence specifying the interest etc payable u/s 220(2) of the Act, Hence proviso 1 also does not get attracted.
As regards the applicability of the Taxation laws (Continuation & Validation of Recovery Proceedings) Act 1964 it does not come into play in the case at hand as fresh demand notice was issued after the disposal of the case by the Hon'ble SC as per its directions contained in Page No. 13 of its order.
The following arguments further raided by the AR for the appellant during the appellate proceedings in its own case were also considered and disposed off:-
(a) Whether the original notice of demand issued by the AO which had already been nullified by the Hon'ble ITAT, New Delhi can be said to be valid and operative after the order of the Hon'ble SC.
(b) After the ITAT set aside the order of the AO for denovo assessment and the appellant, before the assessment could be completed in its case, took the matter to the Hon'ble SC, whether the original demand notice merely remained in abeyance or suspension during the entire proceedings.
(c) Whether the admission of a petition for settlement is by way of appeal or revision against the assessment.
(d) Whether the proceedings before the Hon'ble SC tantamount to the pending continuation of the assessment proceedings.
(e) Whether the order of the Hon'ble SC was the final confirmation of the assessment order set aside by the Hon'ble ITAT for de-novo assessment.
(f) Whether the order of the Hon'ble SC gets merged with the original order which stood set aside by the Hon'ble ITAT. (ii). lf it does not, then does it not gel merged with the assessment proceedings pending before the AO.
(g) Whether the order of the Hon'ble SC is the restoration of the set aside original assessment order and consequently a revival of the original demand.IT(SS)A No. 39/Del./2014 6
(h) Whether the demand created by the erstwhile assessment order which was set aside by the Hon'ble ITAT, can be said to be in operation till the Hon'ble SC's final order.
Having addressed myself to the above questions raised by the appellant in the course of appellate proceedings, I am of the considered view that the answers to the above are in the negative barring argument (d)(ii) mentioned supra whose answer is in the affirmative i.e. the Hon'ble SC's order was the culmination of the assessment proceedings pending before the AO. Assistance is derived from the following fact situations for holding as above which are outlined below:-
(i). It is an undisputed fact that the settlement application was not moved by the appellant against any concluded assessment order. Therefore, there was no merger of the Hon'ble SC's order with such order, the Hon'ble SC's order being the first order.
(ii) It is also a matter of record that the original assessment was set aside.
Consequently, there was no order in existence. When there was no order at the time of filing of the petition by the appellant for settlement of its case before the AO no question of revival of any original demand notice arose.
(iii). It is also an admitted fact that the Hon'ble SC neither confirmed any original order nor any demand emanating therefrom.
(iv) Moreover, no further proceeding for recovery of any tax in pursuance of any notice of demand was also initiated by the AO in the interregnum on the basis of any order or demand served upon the appellant before the disposal of the appeal or the other proceeding by the Hon'ble SC.
I also derive support for holding the view that there was no order in existence after the order in the case of the appellant was set-aside by the Hon'ble ITAT, New Delhi and before the petition was filed by the appellant before the Hon'ble SC, from the principles elaborated by their lordships in the following cases :-
(i). Cora Chand Porel v. Union of India, [1986] 160 ITR 158 (CAL.) In the above case their lordships adjudged as under on the issue at stake:-
"...... The only point urged by Mr. Bagchi assisted by Mr. S.S. Roy is that in the case of lTO v. Seghu Kuchiah Setty [I964] 52 ITR 538 , the Supreme Court held that a fresh demand notice had to be served before an assessee could be treated as a defaulter when the amount of tax was reduced in appeal. It was further held by the Supreme Court that on the Income-lax Officer's order being revised in appeal, the default based on his order and all consequential proceedings must be taken to have been superseded and fresh proceedings have to be started to realize his dues as found by the revised order. Mr. Bagchi argued that after this decision, the law has undoubtedly been changed by the Act of 1964 but the present case, according to Mr. Bagchi, will not come within the purview of the Act of 1964 as the Act deals with cases where no second notice under section 29 of the Act has been issued after the disposal of the IT(SS)A No. 39/Del./2014 7 appeal. The argument of Mr. Bagchi is that when after the reduction of the tax in appeal afresh notice under section 29 of the Act was issued, the first notice under section 29 was superseded and the proceeding based on the first notice thus ceased to exist and there could not be any continuation of the first proceeding which had been superseded..... In the instant case, there is no dispute that the said notice of demand as issued. Thereafter, the Income-tax Officer forwarded the case to the Certificate Officer. After the reduction of the amount in appeal, another notice under section 29 of the Act was issued to the assessee. In ITO v. Seghu Buchiah Setty [1964] 52 ITR 538 (SC), it was held by Sarkar J. (as his Lordship then was), that on the Income-Tax Officer's order being revised in appeal, the default based on his order and all consequential proceedings must be taken to have been superseded and fresh proceedings have to be started to realise his dues as found by the revised order.
Hidayatullah J. (as his Lordship then was) held that when an assessment made by the Income-tax Officer is altered (whether the tax assessed is reduced or increased) by reason of any order under the Act, it is the duty of the Income-tax Officer under section 29 of I.T. Act to issue a fresh notice of demand in the prescribed form and serve if upon the assessee.
Shah J. (as his Lordship then was) held otherwise. According to his Lordship, in the absence of any provision imposing an obligation upon the Income-tax Officer to issue successive notices of demand from time to time for recovery of the amount due during the process of assessment, the notices of demand issued by the Income-tax Officer in exercise of the power under section 29 may be enforced in the manner provided by section 46 and within the period of limitation provided in section 46(7), even after the appeal against the order of assessment by the Income-tax Officer is disposed of, subject to adjustment of the amount to be recovered in the light of the order of the Appellate Assistant Commissioner. A person who has failed to comply with a notice of demand would continue to be a defaulter notwithstanding the reduction of his liability by an order of the appellate authority. There is only one exception to this rule and that is when the order of assessment is wholly set aside."
(ii) CIT v. Rajesh Kumar Dinesh Kumar, [2009] 221 CTR 78(RAJ.) In the above case their lordships adjudged as under on the issue at stake:-
"..... In order to appreciate the contentions, we may gainfully quote the para 2 of the said circular in its entirety, which reads as under:
"2. These issues were comprehensively examined in consultation with the Ministry of Law and the Board has been advised:
(i) where an assessment order is cancelled under section 146 or cancelled/set aside by an appellate/revisional authority and the cancellation/setting aside becomes final (i.e. it is not varied as a result of further appeals/revisions), no interest under section 220(2) can be charged pursuant to the original demand notice. The necessary corollary of this position will be that even when the assessment is reframed, interest IT(SS)A No. 39/Del./2014 8 can be charged only after the expiry of 35 days from the date of service of demand notice pursuant to such fresh assessment order.
(ii) where the assessment made originally by ITO is either varied or even set aside by one appellate authority but, on further appeal, the original order of the ITO 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 lax finally determined. The fact that during an intervening period, there was no tax payable by the assessee under any operative order would make no difference to this position."
6. After going through the said paras, it is clear that sub-para-(ii) becomes applicable only in the eventuality, where the original assessment order is varied, or set aside by the appellate authority, and on further appeal the original order of the AO is restored, either wholly or in part. In the present case, it is not shown that the original assessment order was at all restored on further appeal against the order of the Tribunal, whether dated 31st March, 2005, or the earlier one, whether wholly or in part, rather undisputedly that order of the Tribunal became final, and it was only in compliance of the order of the Tribunal, that fresh assessment order was passed.
In our view, in that event, the matter is squarely covered by the later part of sub-para-
(i), which comprehends a situation, where even when the assessment is refrained pursuant to setting aside of the order by the appellate Court.
7. Learned counsel for the appellant relied upon the judgment of Hon'ble Supreme Court in Vibrant Tyres Ltd. v. ITO (2001) 166 CTR (SC) 1 : [2001] 3 SCC 76.
8. Even after going through that judgment, we are of the view that, that judgment rather goes against the Revenue, and supports the impugned order of the Tribunal, instead of supporting the contentions of the Revenue. Thus, this contention doesn 't hold good.
9. So far as the other two questions framed in the appeals are concerned, having gone through the earlier order of the Tribunal dated 31st March, 2005, which was made available for our perusal, in our view, we do not find any error in the finding recorded by the Tribunal.
10. The appeals thus, have no force and are dismissed summarily."
(iii) CIT v. Sir Shadi Lal Enterprises Ltd. [2009] 310 ITR 283 (All).
In the above case their lordships adjudged as under on the issue at stake:-
"Section 220(1) of the Act talks about fresh demand notice the Interest only from the date specified in demand notice Section 220(2) provides for interest for tax, which is not paid on the amount of demand under section 156 for every month or part of a month, commencing from the day immediately following the date by which it was required to be paid by the notice of IT(SS)A No. 39/Del./2014 9 demand till the date on which amount is paid. This provision covers all notices of demand, whether assessment, rectification, appeal or revision. Where revenue sought to charge interest from the date on which the amount should have been paid irrespective of the date on which the tax was payable under the notice of demand, it was held by the High Court in CIT v. Sir Shadi Lal Enterprises Ltd. [2009] 310 ITR 283 (All), that the liability cannot arise for period before the tax was due. There could be no liability for interest prior to that date. There could have been no possible controversy to justify revenue's appeal to the High Court."
" The Tribunal in Emkay Share and Stock Brokers P. ltd. v. Dy. CIT [20131 28 ITR (Trib) 64 (Mumbai), held that where the original demand notice has been dispensed with and afresh demand notice to give effect to the appellate order has been issued, even though a reassessment is made subsequently, interest under section 220(2) cannot be levied from the date of the original demand notice. It has to be rework from the date of the demand notice consequent to the assessment under section 147. The matter was, therefore, remanded to work out the interest in the light of this law.
Where interest for delayed payment was sought to be levied under section 220(2) from the date of original assessment, though such assessment had been set aside in appeal, but restored afresh, it was held in Smt. K. Indira Rani Vs. CIT [2004] 271 ITR 570 (Ker), that the interest can be levied only for delay, if any, in payment of fresh demand. Since the original demand on appellate order got cancelled, there could not have been a reasonable controversy with the assessee's claim that interest should be limited to the period of actual delay with reference to a valid demand, hi fact, the Board Circular No. 334, dated 3'( April 1982 [1982] 135 ITR (St.) 10 conceded this position of law that once an assessment is cancelled or set aside by an appellate or revisional authority, there can be no interest levied in respect of such demand, so that it would make no difference to this position of law, even if the original demand is restored in the fresh assessment. Though this decision relates to interest payable by the assessee, this view accords with the law in respect of interest payable by Government as decided in Sandvik Asia Ltd. Vs. CIT [2004] 267 ITR 78 (Bom.). It was pointed out, that though the decision was adverse to the taxpayer in restricting the interest receivable by him, the same logic would apply and would spare liability, except where the assessee delays payment after a valid demand. This decision of the High Court confirms such an inference.
(v) The High Court also pointed that interest under section 220(2) is leviable only one month after service of demand notice. The charge of interest under 220(2), from an anterior date was held to be unjustified in Manish D. Shah v. CM. Betgeri, CIT (2009J)318 ITR 397 (Bom.).
(vi) Interest under section 220(2) for the delayed payment of tax has to be reckoned from the date of demand. Where the assessment has been the subject matter of appeal , the demand may get modified, but not for the period for which interest is leviable. In a case, where the Tribunal had only remanded two issues to the Assessing Officer, the date of assessment would continue to be the same. The inference however, would be different, if the assessment is set aside for afresh assessment. This was the view taken IT(SS)A No. 39/Del./2014 10 by the Tribunal in Dy. CIT v. A.S. Krishna and Company P. Ltd. (2009) 319 ITR (AT) 414 (Visakhapatnam). In coming to the conclusion, the Tribunal referred to Board Circular No. 334 dated April 3, 1982 [1982] 135 ITR (2001] 247 ITR 821 (SC). The fact, that the demand may be revised will be relevant only for the purposes of quantification of arrears of tax on which interest is leviable. The Tribunal distinguished the decision in Smt. B. Indra Rani's ease (supra) where the claim with reference to fresh demand notice was entertained only because such demand was in pursuance of a fresh assessment order made after the original assessment had been set aside in appeal.
(vii). Where an amount becomes payable on a fresh assessment after the original assessment has been set aside in appeal, the amount could be treated as having become due only from the date of which it had become due in consequence of fresh assessment and not earlier for purposes of levy of interest under section 220 (2) for delayed payments. It was so decided by the High Court in CIT v. Rajesh Kumar Dinesh Kumar [2010] 325 ITR 346 (Raj.). Revenue had sought to rely upon the decision in Vikrant Tyres Ltd's case (supra), which it was found, does not support revenue's case. Special leave against the decision of the High Court in this case was also dismissed [2010] 323 ITR (St.) 51 "
The undertones in all the above referred cases were as follows:-
(a) That in the case of ITO v. Seghu Buchiah Setty [1964] 52 ITR 538, the Supreme Court held that a fresh demand notice had to be served before an assessee could be treated as a defaulter when the amount of tax was reduced in appeal.
(b) That the law has undoubtedly been changed by the Act of 1964. Cases where no second notice under section 29 of the Act was issued after the disposal of the appeal will come within the purview of the Act of 1964 as the said Act deals with the situation where no second notice was issued by the Government.
(c) That after a fresh notice is issued the first notice is superseded and the proceeding based on the first notice thus ceases to exist. There cannot be any continuation of the first proceedings which have been superseded.
(d) That in ITO v. Seghu Buchiah Setty [1964] 52 TTR 538 (SC), it was held by Sarkar J. (as his Lordship then was), that on the Income-tax Officer's order being revised in appeal, the default based on his order and all consequential proceedings must be taken to have been superseded and fresh proceedings have to be started to realise his dues as found by the revised order.
(e) That it is the duty of the Income-tax Officer to issue a fresh notice of demand in the prescribed form and serve it upon the assessee after a fresh assessment order is passed.
(f) That a person who has failed to comply with a notice of demand would continue to be a defaulter notwithstanding the reduction of his liability by an order of the appellate authority. There is only one exception to this rule and that is when the order of assessment is wholly set aside (as happened in the instant case).IT(SS)A No. 39/Del./2014 11
(g) That orders cancelled/set aside by an appellate/revisional authority and the cancellation/setting aside becomes final (i.e. it is not varied as a result of further appeals/revisions), no interest under section 220(2) can be charged pursuant to the original demand notice. (In the instant case there was no variation of the assessment order by way of further appeal or revision. Rather the appellant took the matter to the Hon'ble SC even before the AO could pass an order and raise a demand).
(h) That interest can be charged only after the expiry of 35 days from the date of service of demand notice pursuant to such fresh assessment order.
(i) That where the original order of the ITO is restored on further appeal either in part or in whole or is either varied or even set aside by one appellate authority, 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. (In the case at hand there was no concluded assessment order after the initial order was set aside).
(j) That the fact that during an intervening period, there was no tax payable by the assessee under any operative order would make no difference to this position.
(k) That where fresh assessment order was passed in compliance with the order of the Tribunal 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. (No fresh assessment order was passed in compliance with Hon'ble ITAT's order here).
(l) That the liability cannot arise for period before the tax was due. There could be no liability for interest on taxes due prior to that date.
(m) That interest under section 220(2) cannot be levied from the date of the original demand notice. It has to be reworked from the date of the demand notice consequent upon the assessment under section 147.
(n) That the interest can be levied only for delay, if any, in payment of fresh demand.
Since the original demand on appellate order got cancelled, there could not have been a reasonable controversy with the assessee's claim that interest should be limited to the period of actual delay with reference to a valid demand. (Smt. B. Indira Rani Vs. CIT [2004] 271 ITR 570 (Ker)).
(o) That once an assessment is cancelled or set aside by an appellate or revisional authority, there can be no interest levied in respect of such demand, so that it would make no difference to this position of law even if the original demand is restored in the fresh assessment.
IT(SS)A No. 39/Del./2014 12(p) That in a case, where the Tribunal had only remanded two issues to the Assessing Officer, the date of assessment would continue to be the same. The inference however, would be different, if the assessment is set aside for a fresh assessment. (Dy. CIT v. A.S. Krishna and Company P. Ltd. [2009] 319 ITR (AT) 414 (Visakhapatnam), (Board Circular No. 334 dated April 3, 1982 (1982) 135 ITP [2001] 247 ITR 821 (SC).
(q). That where an amount becomes payable on a fresh assessment after the original assessment has been set aside in appeal, the amount could be treated as having become due only from the date of which it had become due in consequence of fresh assessment and not earlier for purposes of levy of interest under section 220 (2) for delayed payment (High Court in CIT v. Rajesh Kumar Dinesh Kumar [2010] 325 ITR 346 (Raj.), (Vikrant Tyres Ltd's case (supra) [2010] 323 ITR (St.) 51.
On a composite consideration of the overtones of the principles as described above the inevitable conclusion is that the chargeability u/s 220(2) of the Act arises from the fresh demand notice issued by the AO pursuant to the order of the Hon'ble SC in the case of the appellant.
In addition to the above the Hon'ble Delhi High Court in the case of L.N. Gadodia & Sons P Ltd Vs DCIT, [2007] 207 CTR Del 669, has categorically and unequivocally stated that is not open for the AO to charge interest u/s 220(2) of the IT Act, 1961, which is not indicated in the Settlement Commission's order. Accordingly, it is directed that the AO shall reconsider the same strictly in the light of the order made by the Settlement Commission." In the instant case, the Hon'ble SC did not indicate that interest u/s 220(2) was chargeable in the appellant's case.
Having regard to the above factual and legal discussion it shall be amply clear that in the peculiar factual matrix obtaining in this case, the AO was not justified in holding the chargeability of interest u/s 220(2) of the Act from the date of original notice of demand as sustainable in law when there was no order in existence after the original assessment order by reason of which the original demand notice was raised, was set-aside for de-novo assessment.
For the reasons elaborated by me hereinabove, I am of the firm opinion that the appellant was not exigible to interest u/s 220(2) of the Act from the date of the notice of demand raised in the first round of litigation which was nullified by the Hon'ble ITAT, New Delhi by directing de-novo consideration of the facts of the case. Accordingly grounds 3 to 6 are allowed."
4. The above analysis of the issue on the anvil of various decisions, relevant provisions of law and other attending facts and circumstances of the IT(SS)A No. 39/Del./2014 13 case made by the ld. CIT(A), stands uncontroverted on behalf of the Revenue to support the grounds raised in the present appeal. We, therefore, find no justification to interfere with the impugned order. Accordingly, the appeal of the Revenue deserves to be dismissed being bereft of merits.
5. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open court on 13.11.2017.
Sd/- Sd/-
(H.S. Sidhu) (L.P. Sahu)
Judicial member Accountant Member
Dated: 13.11.2017
*aks*
Copy of order forwarded to:
(1) The appellant (2) The respondent
(3) Commissioner (4) CIT(A)
(5) Departmental Representative (6) Guard File
By order
Assistant Registrar
Income Tax Appellate Tribunal
Delhi Benches, New Delhi