FINANCE (NO. 2) ACT, 1998

Section 220(2)

Kar Vivad Samadhan Scheme, 1998 - Amount payable under the scheme - Consideration of interest amount computed under Section 220(2) of the Income Tax Act, 1961 -

Petitioner sought issuance of direction to revenue to issue a fresh certificate re-determining amount payable under Kar Vivad Samadhan Scheme, 1998 without taking into consideration interest amount computed under Section 220(2) of the Income Tax Act, 1961. Held: Section 156 of Income Tax Act, 1961, which deals with notice of demand and thereafter Rule 15 of the Income Tax Rules, 1962 which says that notice of demand under Section 156 shall be in Form No. VII. Clause (3) of Form VII provides that notice of demand under Section 156 shall contain a provision informing the concerned assessee that if he did not pay the amount within the period specified, he would be liable to pay simple interest at one and one-half percent for every month or part of a month from the date commencing after end of the period in accordance with Section 220(2). Thus, designated authority was within his powers in adding up interest under Section 220(2) though not quantified at earlier point while processing application under the Kar Vivad Samadhan Scheme, 1998.

Followed:M/s. Punjab Crockery House v. CIT (2014) 52 taxmann.com 71 (Andhra Pradesh) : 2014 TaxPub(DT) 3957 (AP-HC); P. Ramanathan v. ITO (2002) 121 Taxman 137 (Madras) : 2002 TaxPub(DT) 0168 (Mad-HC); Rajam Pictures Circuit & Others v. CIT & Others (2000) 108 Taxman 26 (Mad) : 2000 TaxPub(DT) 0817 (Mad-HC)

REFERRED :

FAVOUR : Against the petitioner

A.Y. :

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