INCOME TAX ACT, 1961

Section 220(2)

Recovery - Applicability of section 220(2) as amended by Finance Act, 2014 - High Court had passed the order under section 260A(5) and proviso inserted in section 220(2) had no reference to order passed under section 260A -

Question arose for consideration was whether section 220(2) as amended by Finance Act, 2014 was applicable in the instant case where High Court had passed the order under section 260A(5) and proviso inserted in section 220(2) had no reference to order passed under section 260A but only to an order passed under section 260. Held: Sub-section (5) of section 260A provides that High Court would decide the question of law and deliver such judgment thereon containing the grounds on which such decision is founded. Further, sub-section (1A) of section 260 provides that where High Court delivers a judgment in an appeal filed before it under section 260A, effect would be given to the order passed on appeal by AO on the basis of a certified copy of judgment. In the instant case, where AO had passed the appeal effect order, same was thus passed in pursuance of section 260(1A) read with section 260A. Therefore, contention of assessee that proviso to section 220(2) talked about order passed under section 260 and not under section 260A could not be accepted and assessee was liable to pay interest under section 220(2) from the expiry of period mentioned in original notice of demand and ending with the day when same is paid.

Distinguished:Vikrant Tyres Ltd. v. ITO (2001) 247 ITR 821 (SC) : 2001 TaxPub(DT) 1110 (SC).

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2004-05 & 2006-07

INCOME TAX ACT, 1961

Section 234D

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