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Girnar Investment Ltd vs The Commissioner Of Income Tax 4 & Anr on 5 January, 2012 cites

Bharat Commerce & Industries Ltd. vs Union Of India And Ors. on 29 August, 1990

"As stated earlier, the correct legal effect of the final order passed by the Income Tax Appellate Tribunal is that the earlier notice of demand stood revived and became legal, valid and WP(C) No.5750/2010 Page 24 of 30 enforceable against the assessee. In such circumstances, there is no question of issuing fresh notice of demand as claimed. Further, in view of Section 3 of the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964, the original notice of demand issued by the Income Tax Officer continued to be valid and operative against the assessee. I am of the view that from a combined reading of Sections 156 and 220(2) of the Act, the assessee could not escape from his liability of payment of interest and more particularly, in the light of the legal position, as per the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964. In other words, the 1964 Act comes to the rescue of the Revenue to hold that the original notice of demand issued by the Income Tax Officer continued to be valid and operative against the petitioner. As rightly observed by the Division Bench in Bharat Commerce and Industries Ltd. V. Union of India (1991) 188 ITR 277 (Delhi), the demand of interest cannot be termed as a penal provision, as the rationate behind the said provision is not to penalise a party but to make a provision for compensation to the Department on the failure of the assessee to make payment on the first notice of demand. I have already concluded that as per the order of the Appellate Tribunal, the original demands stood revived, if that is so, in the absence of payment of entire amount demanded, the respondents are justified in claiming interest under Section 220(2) of the Act. To make it clear even if a part of the amount of tax is outstanding, interest is chargeable from the expiry of 35 days. Even though learned senior counsel for the petitioner very much relied on some of the decisions of the various High Courts as mentioned above, after carefully scrutinising the factual position therein, I am of the view that those cases are either distinguishable or not applicable to the facts of the present case. As a matter of fact, I have already concluded that in most of the cases referred to by learned senior counsel for the petitioner, the assessee in those cases has paid the entire tax demanded, and in some cases, demand arose under WP(C) No.5750/2010 Page 25 of 30 rectification orders. In such circumstances, with respect, I am not in a position to follow those decisions".
Delhi High Court Cites 27 - Cited by 3 - B N Kirpal - Full Document

Pitambardas Dulichand And Ors. vs Union Of India (Uoi) And Ors. on 13 November, 1997

36. The judgment of the Madhya Pradesh High Court in Pitambardas Dulichand and Ors. Vs Union of India and others (1999) 239 ITR 69 rested on the principle of merger. In that case the petitioner-assessee claimed that the interest u/s.220(2) was payable only if the amount of tax was not paid in accordance with section 220(1) and in the absence of any demand, no interest could be charged. The contention was rejected by the court, and in doing so the court applied the doctrine of merger and on that basis held that "when the original demand is affirmed by the last court then that amounts to affirming the original demand and the amount becomes due to the Revenue; therefore, the interest being compensatory in nature, the Revenue is entitled to charge interest from the date of the original order. In this view of the matter, we are the opinion that the circular issued by the Central Board of Direct Taxes appears to be well- founded".
Madhya Pradesh High Court Cites 24 - Cited by 5 - A K Mathur - Full Document
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