ROOPALI DYING AND PRINTING WORKS Vs. ASSISTANT COMMISSIONER

JUDGEMENT

(1.) This Special Civil Application has been filed at the instance of the petitioner assessee praying inter alia for a writ of certiorari quashing the decision of the respondent department calling upon the petitioner-assessee to pay under Section 220 of the Income-Tax Act 1961 (hereinafter referred to as the Act) the interest of Rs. 3 72 852 on declaration that the respondent cannot charge any interest under Section 220(2) of the Act.

(2.) It is stated in details that the Assessment Order for the Assessment Year 1984-85 on total income of Rs. 21 54 740 was passed on 30-3-1987. On May 22 1987 Commissioner of Income-Tax (Appeals) passed an order reducing the income for the A. Y.1984-85 to Rs. 4 9 589 Department filed appeal before the Income-ax Appellate Tribunal Ahmedabad Bench B (hereinafter referred to as the Tribunal) and the Tribunal passed order dated 23-7-1992 increasing the income to Rs. 12 94 380 for A. Y. 1984-85. Consequently the respondent authority passed order dated 30-12-1992 to give effect to the order of the Tribunal and calculated the interest under Section 220 of the Act at Rs. 27 674 and the petitioner was directed to pay the amount of Rs. 6 3 790 wherein interest was calculated at Rs. 3 21 471 The petitioner however wrote a letter dated 30-3-1993 to the Deputy commissioner of Income-Tax requesting for charging the interest from 23-7-1993 i.e. the date on which the order was passed by the Tribunal till the date of payment. The petitioner by his another letter dated 30-3-1993 expressed willingness to pay off the demand of tax and intimating its desire to approach the Commissioner of Income-tax for the waiver of interest. By its representation dated 30 the petitioner applied for the waiver of the interest under Section 220 of the Act. There is another representation dated 14-12-1993 taking a stand that the interest cannot be charged from the date of original assessment order but can only be charged from the order of the Tribunal and request was made for the waiver of the interest under Section 220 of the Act of Rs. 3 72 852 The Commissioner of Income-tax by order dated 31 waived interest of Rs. 72 851 retaining interest of Rs. 3 0 0 Being aggrieved by the said order the assessee has approached this Court on the ground that for charging of interest under Section 220 of the Act what is needed in service of a demand notice under Section 156 and non-payment within 30 days of the service of the said notice of the demand the claim of interest can be raised. In the instant case as a result of the order of the Tribunal the petitioner has paid off the amount of Rs. 3.36 401 which is the balance payable as a result of the order of the Tribunal without even any notice of demand from the department and therefore there is no question of applying Section 220 of the Act in the present case. It is alleged that nothing has been given in writing informing or intimating the petitioner the basis of calculation of Rs. 3 72.852 and asking the petitioner to pay the same. It is contended that interest under Section 220 of the Act can be charged after the order of the Tribunal raising the demand. and if the petitioner has not paid the said demand within 30 days of the receipt of notice under Section 156 of the Act. It is further contended that the question of recovery of any interest under Section 220 of the Act from the petitioner cannot arise as the petitioner has paid the demand even before issuance of notice under Section 156. Developing all these points the petitioner has prayed for the aforesaid reliefs in this petition.

(3.) The petition is seriously opposed by the respondent by filing affidavit-in-reply. It is disclosed inter alia that the liability to pay interest under Section 220(2) of the Act is automatic and it arises by operation of law. The liability to pay interest does not cease and such liability is absolute liability and in the determination of quantum of interest as is made in the instant case interference by Writ Court is not at all necessary.