Iapl/422/2010 Of The Commissioner Of Income Tax v. Shri Rajeev Bansal

Court No. - 35Case :- INCOME TAX APPEAL No. - 422 of 2010Appellant :- The Commissioner Of Income TaxRespondent :- Shri Rajeev Bansal Counsel for Appellant :- A.N.Mahajan/Sc,D Awasthi,G Krishna,Praveen Kumar,Rk Upadhyay,S Chopra,S.S.C. I.T.Counsel for Respondent :- Shakeel Ahmad Hon'ble Bharati Sapru,J.Hon'ble Neeraj Tiwari,J. Heard Shri Praveen Kumar, learned counsel for thedepartment and Shri Ashish Bansal, learned counsel for theassessee. This appeal under Section 260-A of the Income Tax Act,1961(hereinafter referred to as the 'Act') has been filed by thedepartment against the order of the Income Tax AppellateTribunal dated 05.07.2010 for the assessment year 1993-94.The questions of law sought to be answered are as hereunder: "1. Whether the Hon'ble ITAT is correct in law and on facts in holding that the interest u/s 220(2) of the Income Tax Act, 1961 could be charged only on the amount of Rs.4,07,990/- forthe period May, 1998 to March 2002 without appreciating the fact that the assessee was in default in not depositing the tax due to him? 2. Whether the Hon'ble ITAT is correct in law and on facts and in directing the AO to computethe interest leviability u/s 220(2) on the demand on income of Rs.4,07,990/- till April/May2002 as against the interest leviablity u/s 220(2) on the demand on income of Rs.1,02,03,490/-as originally assessed.? The Tribunal has categorically come to the conclusion that theinterest liable to be paid by the assessee was on the finalamount which was assessed against the assessee i.e. a sum ofRs.4 lacs odd and not on the total amount, as the originaldemand was modified from time to time by the CIT as well asthe Tribunal. The view taken by the Tribunal is correct. A demand underSection 220(2) can only be made against the assessee whenthere is a demand which has crystallized and when theassessee fails to pay the tax on that demand within thestipulated period. It is only in the event of default of anascertained amount that it can be said that the assessee wasliable to pay simple interest as provided under Section 220(2) of the Act. In this case, a categorical finding of fact is that the amountwhich was ultimately found to be due was a sum of Rs.4 lacsand odd. The order of the Tribunal is therefore, upheld by thisCourt. The questions of law is answered in favour of the assessee andagainst the department. The appeal is accordingly dismissed. Order Date :- 5.3.2018/pks