ACIT, Mysore V. Sri. M. Ramnath Shenoy, Mysore

ITA 863/BANG/2011

• Counselvise Citation: 86321114 RSA 2011
• Duration Of Justice: 1 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-11-2012
• Assessment Year: 1995-1996
• Appeal Filed On: 03-10-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A SUNDARARAJAN JT
• Assessee Lawyers: C S RAMPRIYADAS
• Keywords: Recovery proceedings; Opportunity of being heard; Retrospective amendment; Revised return
• Section: 143(3); 244A; 234B; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N. BARATHVAJA SANKAR, VICE PRESIDENT AND SHRI N.V. VASUDEVAN, JUDICIAL MEMBER ITA NO.863/BANG/2011 ASSESSMENT YEAR : 1995-96 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), MYSORE. VS. SHRI M. RAMANATH SHENOY, PARTNER, MANGALORE GANESH BEEDI WORKS, VINOBHA ROAD, MYSORE. PAN: ALHPS 8503J APPELLANT RESPONDENT APPELLANT BY : SHRI A. SUNDARARAJAN, JT. CIT(DR) RESPONDENT BY : SHRI C.S. RAMPRIYADAS, C.A. DATE OF HEARING : 19.11.2012 DATE OF PRONOUNCEMENT : 23.11.2012 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORD ER DATED 20.07.2011 OF THE CIT(APPEALS), MYSORE RELATING TO ASSESSMENT YEAR 1995- 96. 2. THE FACTS GIVING RISE TO THE AFORESAID AP PEAL ARE AS FOLLOWS. THE ASSESSEE IS AN INDIVIDUAL. HE WAS AN ERSTWHILE PAR TNER IN THE FIRM MANGALORE GANESH BEEDI WORKS, MYSORE. THE ASSESSE E FILED HIS RETURN OF ITA NO.863/BANG/2011 PAGE 2 OF 11 INCOME ON 01-07-1996 FOR THE ASSESSMENT YEAR 1995-9 6. THE ASSESSING OFFICER PASSED AN ORDER U/S. 143(3) OF THE INCOME-T AX ACT ON 18-11-96 ASSESSING THE INCOME AT Q 2,23,80,590 AND COMPUTED THE TAX LIABILITY AT Q 71,60,930, INCLUSIVE OF INTEREST U/S. 234A AND 234B . THE ASSESSING OFFICER ISSUED NOTICE OF DEMAND U/S. 156 OF THE ACT DATED 1 8.11.96 SEEKING PAYMENT OF THE SAID DEMAND, THE MATTER WENT IN APP EAL BEFORE THE APPELLATE COMMISSIONER WHO UPHELD THE FINDINGS OF T HE AO VIDE HIS ORDER DATED 14.03.97. THE AO THEREAFTER COLLECTED THE SA ID DEMAND, IN FULL, ALONG WITH INTEREST U/S 220(2) FOR THE DELAY IN PAYMENT O F TAX ON 31-03-97. THE BREAKUP OF THE AMOUNTS COLLECTED AS MENTIONED IN TH E CHALLAN IS MENTIONED BELOW: INCOME TAX 45,88,566 INTEREST U/S. 234A 7,34,164 INTEREST U/S. 234B 18,38,200 INTEREST U/S .220(2) 4,29,654 TOTAL 75,90,584 3. THE AO THEREAFTER PASSED AN ORDER U/S. 143(3) R. W.S. 148 DATED 28.4.1997 IN WHICH HE ASSESSED AN ADDITIONAL SUM OF RS.30,000/- BEING INCOME OFFERED BY THE ASSESSEE IN A REVISED RETURN OF INCOME AND ANOTHER SUM OF RS.23,93,925/- WHICH WAS THE SHARE OF PROFIT S OF THE ASSESSEE IN THE FIRM MANGALORE GANESH BEEDI WORKS. A DEMAND OF Q 12,16,826 ON ACCOUNT OF ADDITIONS TO THE RETURNED INCOME VIDE DE MAND NOTICE ISSUED ON 28-04-1997 WAS RAISED BY THE AO. THIS DEMAND WAS N OT SATISFIED BY PAYMENT. THE MATTER WENT IN APPEAL BEFORE THE TRIB UNAL IN ITA 258(BANG)/1997, WHEREIN THE ITAT VIDE ORDER DATED 1 0TH JULY 1997 ITA NO.863/BANG/2011 PAGE 3 OF 11 GRANTED RELIEF OF THE ENTIRE ADDITION. THE ASSESSIN G OFFICER PASSED AN ORDER THEREAFTER ON 08.10.1997 GIVING EFFECT TO THE ORDER S OF THE ITAT AND DETERMINED A REFUND DUE TO THE ASSESSEE. THUS THE D EMAND DATED 28.04.1997 WAS NOT SATISFIED BY ACTUAL PAYMENT BUT GOT REVISED PURSUANT TO THE ORDER OF THE ITAT RESULTING IN A REFUND TO THE ASSESSEE. 4. THE REVENUE FILED APPEAL AGAINST ORDER OF ITAT I N ITA NO.258/BANG/1997 DATED 10.7.1997 BEFORE THE HONBLE HIGH COURT OF KARNATAKA WHICH WAS HEARD AND DISPOSED VIDE ITS ORD ER DATED19-12-2002, CONFIRMING THE ORDER OF THE TRIBUNAL. THE INCOME-T AX DEPARTMENT TOOK THE MATTER IN APPEAL BEFORE THE SUPREME COURT AND THE H ONBLE SUPREME COURT REVERTED THE MATTER TO THE HIGH COURT OF KARNATAKA TO ADJUDICATE THE CASE AFRESH. THE HONBLE HIGH COURT OF KARNATAKA PASSED ITS ORDERS ON 23-12- 2010 AGAINST THE ASSESSEE CONFIRMING THE ORDERS OF THE AO. THUS THE DEMAND DATED 28.4.1997 GOT REVIVED PURSUANT TO THE ORDER OF THE KARNATAKA HIGH COURT DATED 23.12.2010. 5. THE AO PASSED AN ORDER DATED 23-03-2011, SERVED ON THE ASSESSEE ON 28-3-2011, GIVING EFFECT TO THE ORDER OF THE HIG H COURT OF KARNATAKA. IN THIS ORDER THE AO CHARGED INTEREST U/S.220(2) OF TH E ACT VIZ., A SUM OF RS.1,94,15,026/-. LATER ON AN ORDER U/S.154 OF THE ACT WAS PASSED IN WHICH INTEREST U/S.220(2) OF THE ACT WAS RECTIFIED AND QU ANTIFIED AT RS.1,53,07,451/-. THESE ORDERS PASSED BY THE AO WE RE SUBJECT MATTER OF APPEAL BY THE ASSESSEE BEFORE CIT(A). ITA NO.863/BANG/2011 PAGE 4 OF 11 6. IN ITS APPEAL, THE ASSESSEE SUBMITTED THAT THERE WAS A DELAY IN THE PAYMENT OF TAXES FROM THE TIME OF THE ISSUE OF THE FIRST NOTICE OF DEMAND U/S 156 ON 18-11-1996 UNTIL THE TAXES WERE COLLECTED ON 31-03-199. FOR THIS DELAY INTEREST U/S.220(2) OF THE ACT HAD ALREADY BE EN COLLECTED BY THE AO AT Q 4,29,684. IT WAS SUBMITTED THAT THEREAFTER ONLY R EFUNDS AROSE TO THE ASSESSEE AND THERE WAS NO DEFAULT ON THE PAYMENT OF TAXES AS IS EVIDENT FROM THE REFUND ISSUED ON 8TH OCTOBER 1997 AND DEMA ND NOTICES ISSUED ON 11.03.2003 STATING SPECIFICALLY THAT AN AMOUNT OF Q 19,34,296 IS DUE TO THE ASSESSEE. 7. TO SUMMARIZE, IT WAS SUBMITTED THAT THERE WAS A DEMAND AFTER THE ASSESSMENT ORDER WAS PASSED AND THE SAME WAS PAID A LONG WITH INTEREST U/S 220(2) OF THE ACT. THEREAFTER IN APPELLATE PROC EEDINGS BEFORE THE ITAT AND THE HIGH COURT, REFUNDS AROSE TO THE ASSESSEE O N 08-10-1997 AND 11- 03-2003. NOW IN PURSUANCE OF THE ORDER OF THE HIGH COURT, THE AO HAS RAISED A DEMAND ON THE ASSESSEE FOR THE TAXES AND A LSO FOR INTEREST U/S 220(2) OF THE ACT OSTENSIBLY FOR THE PERIOD FROM TH E ORIGINAL NOTICE OF DEMAND TO THE DATE OF GIVING EFFECT TO THE PRESENT ORDER OF THE HIGH COURT, WHICH ACCORDING TO THE ASSESSEE, IS WHOLLY ERRONEOU S AND AGAINST LAW. 8. THIS BEING THE FACTS OF THE CASE, IT WAS SUBMITT ED THAT THE PROVISIONS OF SECTION 220(2) OF THE ACT GET ATTRACTED ONLY FRO M 28-03-2011 PROVIDED A ITA NO.863/BANG/2011 PAGE 5 OF 11 VALID NOTICE OF DEMAND IS SERVED ON THE ASSESSEE. T HE ORDER U/S 154 OF THE ACT DATED 3L-03-2011 WAS NOT ACCOMPANIED BY A NOTIC E OF DEMAND AND THE EARLIER ORDER DT. 28-03-2011 WAS ACCOMPANIED BY A N OTICE OF DEMAND WITH AN AMOUNT MENTIONED THEREIN WHICH IS EQUAL TO THE E XACT AMOUNT THAT HAS BEEN COMPUTED IN THE SAID ORDER AS THE INTEREST U/S 220(2). THERE IS NO DEMAND MADE FOR THE TAXES AS YET BY THE AO. 9. IT WAS SUBMITTED THAT THE PROVISIONS OF SECTION 220(2) OF THE ACT WAS SUBJECT MATTER OF DETAILED DISCUSSION BY THE HONBL E SUPREME COURT IN THE CASE OF VIKRANT TYRES LIMITED 247 ITR 821 (SC). THE HONBLE SUPREME COURT IN AN IDENTICAL MATTER OF FACT HAS HELD, INTE RPRETING THE PROVISIONS OF SECTION 220(2) OF THE ACT, THAT A NOTICE OF DEMAND U/S 156 ONCE DULY PAID CANNOT BE REVIVED BY A DECISION IN APPEAL AGAINST T HE ASSESSEE. IF THE FRESH NOTICE OF DEMAND IS ALSO PAID THERE CAN BE NO INTEREST IN THE INTERREGNUM. 10. THE CIT(APPEALS) ACCEPTED THE PLEA OF THE ASSE SSEE AND HE HELD AS FOLLOWS:- I HAVE CONSIDERED THE ARGUMENTS OF THE APPELLANT A ND THE VARIOUS ORDERS PASSED BY THE AO CONSEQUENT TO AND GIVING EF FECT TO THE ORDER OF HONBLE HIGH COURT OF KARNATAKA IN THE APP ELLANTS GROUP CASES WITH PARTICULAR REFERENCE TO CHARGING O F INTEREST U/S 220(2). I HAVE ALSO EXAMINED THE CASE LAW CITED BY THE APPELLANT. THE HONBLE SUPREME COURT IN THE CASE OF VIKRANT TY RES LTD. VS ITO, 247 ITR 821 HAS HELD THAT ONCE THE DEMANDS UND ER THE NOTICES ISSUED U/S 156 ARE SATISFIED AND NOTHING WA S DUE PURSUANT TO THE NOTICE OF DEMAND SO ISSUED, THE DEPARTMENT H AD NO RIGHT TO DEMAND INTEREST FOR THE PERIOD COMMENCING FROM THE DATE OF REFUND OF THE TAX UPON APPELLATE ORDER TILL THE TAX ES WERE FINALLY PAID AFTER THE DISPOSAL OF THE REFERENCE. THE ONLY DIFFERENCE BETWEEN THE CASE LAW CITED AND THE APPELLANTS CASE IS THAT IN THAT CASE THE DEMAND WAS PAID WITHIN DUE DATE MENTIONED U/S 156 BUT IN THE CASE OF THE APPELLANT THE DEMAND WAS PAID BE LATEDLY ITA NO.863/BANG/2011 PAGE 6 OF 11 TOGETHER WITH INTEREST U/S 220(2) TILL THE DATE OF PAYMENT. UNDER THESE CIRCUMSTANCES, IT HAS TO BE HELD THAT THE DEM AND U/S 156 IS SATISFIED ONCE IT IS PAID TOGETHER WITH INTEREST U/ S 220(2) TILL THE DATE OF PAYMENT. THERE IS NO DISPUTE ON THE POINT T HAT THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IS BINDING. RESPECTFULLY FOLLOWING THE DECISION OF HONBLE SUPREME COURT, I DIRECT THE AO NOT TO LEVY INTEREST 220(2) FROM THE DATE OF REFUND OF TAX UPON APPELLATE ORDER TILL THE DATE OF RAISING OF FRESH D EMAND CONSEQUENT TO THE ORDER OF HONBLE HIGH COURT IN THE APPELLANT S GROUP CASES. HOWEVER, ANY DELAY SUBSEQUENTLY NEEDS TO BE CHARGED . ACCORDINGLY, THE APPEAL OF THE APPELLANT IS ALLOWED . 11. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS), THE REVENUE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS FOLLOWS:- I. THE LEARNED CIT(A), MYSORE HAS ERRED IN ALLOWI NG THE APPEAL. 1. THE ASSESSEE HAS NOT COMPLIED WITH DEMAND NOTIC E U/S 156 WITHIN THE STIPULATED TIME AND HENCE INTEREST U/S 2 20(2) WAS ATTRACTED. THUS THE FACTS OF THE CASE OF M/S. VIKR ANT TYRES LTD VS. ITO, 247 ITR 821 (SC) ARE NOT THE SAME IN RESPE CT OF THIS CASE. HENCE INVOKING THE CASE OF VIKRANT TYRES LTD VS. ITO 247 ITR 821 (SC) IS PATENTLY WRONG AND OPPOSED TO THE F ACTS OF THIS CASE. 2. SUB-SECTION (2) OF SECTION 3 OF TAXATION LAWS (CONTINUATION AND VALIDATION OF RECOVERY PROCEEDING S 1964 KEPT ALIVE THE DEMAND RAISED. THEREFORE INTEREST U/S 220 (2) WAS LEVIED RIGHTLY AND THE LEARNED CIT(APPEALS) HAS ERRED IN O VERLOOKING THIS FACT. 3. FOR THESE AND ANY OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING THE APPEAL MAY BE ALLOWED. 12. WE HAVE HEARD THE SUBMISSIONS. THE LD. DR REIT ERATED THE STAND OF THE REVENUE AS REFLECTED IN THE GROUNDS OF APPEAL. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE CIT(APPEALS). ITA NO.863/BANG/2011 PAGE 7 OF 11 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. SEC .220(2) OF THE ACT PROVIDES THAT THE AMOUNT SPECIFIED AS PAYABLE IN TH E NOTICE OF DEMAND U/S/156 OF THE ACT IS NOT PAID WITHIN PERIOD OF 30 DAYS FROM THE DATE OF SERVICE OF THE NOTICE LIMITED UNDER SUB-SECTION (1 ) OF SEC.220 AT THE PLACE AND TO THE PERSON MENTIONED IN THE NOTICE, THEN THE ASSESSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT THE RATE SPECIFIED IN SEC.220(2) OF THE ACT FOR EVERY MONTH COMPRISED IN THE PERIOD COMMENCING FROM THE DAY IMMEDIATELY FOLLOWING THE END OF THE PERIOD MENTION ED IN SUB-SECTION (1) OF SECTION 220 AND ENDING WITH THE DAY ON WHICH THE AM OUNT IS PAID. THE HONBLE SUPREME COURT HELD IN ITO VS.SEGU BUCHIAH SETTY 52 ITR 538(SC) THAT WHERE A NOTICE OF DEMAND IS GIVEN IN RESPECT O F THE TAX DETERMINED BY THE ASSESSMENT ORDER AND THE SUBSEQUENT ORDERS IN A PPEAL OR REVISION EITHER ENHANCES OR REDUCES THE AMOUNT OF TAX DEMAND ED, A FRESH NOTICE OF DEMAND SHOULD BE ISSUED UNDER SECTION 156 OF THE AC T. THIS DECISION WAS SUPERSEDED WITH RETROSPECTIVE EFFECT BY THE TAXATIO N LAWS (CONTINUATION AND VALIDATION OF RECOVERY PROCEEDINGS) ACT, 1964 ( VALIDATING ACT) WHICH PROVIDED THAT IN CASE OF REDUCTION IN APPEAL OR OTH ER PROCEEDING NO FRESH NOTICE OF DEMAND NEED TO ISSUED BUT THE FACT OF RED UCTION SHOULD BE INTIMATED TO THE ASSESSEE AND TO THE TRO AND IN CAS E OF ENHANCEMENT, A FRESH NOTICE OF DEMAND SHOULD BE ISSUED ONLY FOR TH E ADDITIONAL AMOUNT. IN VIKRANT TYRES LTD. (SUPRA) , THE HONBLE SUPREME COURT HELD THAT THE VALIDATING ACT ONLY REVIVES THE OLD DEMAND NOTICE W HICH HAD NEVER BEEN SATISFIED BY THE ASSESSEE AND WHICH HAD GOT QUASHED DURING SOME STAGE OF THE CHALLENGE AND WAS FINALLY RESTORED BY AN ORDER OF A HIGHER FORUM. IN ITA NO.863/BANG/2011 PAGE 8 OF 11 SUCH A SITUATION SEC.3 OF THE VALIDATION ACT RESTOR ES THE ORIGINAL DEMAND NOTICE WHICH WAS NEVER SATISFIED BY THE ASSESSEE AN D THE SAID SECTION DOES AWAY WITH THE NEED TO ISSUE A FRESH NOTICE; TH AT SECTION CANNOT BE RESORTED TO FOR REVIVING A DEMAND NOTICE WHICH IS A LREADY FULLY SATISFIED. 14. THE LEARNED DR HAS DRAWN OUR ATTENTION TO THE L AW WITH REGARD TO CHARGING OF INTEREST U/S. 220(2) OF THE ACT AS SUMM ARIZED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF GIRNAR INVESTMENT LTD. V. CIT (340 ITR 529)(DEL) , (A DECISION RENDER AFTER CONSIDERING VARIOUS DECI SIONS ON THE ISSUE) AS FOLLOWS:- 37. TO SUM UP, THE FOLLOWING PRINCIPLES CAN BE GL EANED FROM THE VARIOUS DECISIONS (A) FRESH NOTICES OF DEMAND NEED NOT BE ISSUED EVERY TIME THE TOTAL INCOME UNDERGOES A CHANGE DUE TO APPELLATE OR REVISIONAL ORDERS SINCE S. 3(B)(III) OF THE VALI DATING ACT PROVIDES THAT ANY PROCEEDING INITIATED ON THE BASIS OF THE NOTICE OF DEMAND SERVED UPON THE ASSESSEE BEFORE THE DISPOSAL OF THE APPEAL OR OTHER PROCEEDING MAY BE CONTINUED IN RELA TION TO THAT AMOUNT SO REDUCED FROM THE STAGE AT WHICH SUCH PROC EEDINGS STOOD IMMEDIATELY BEFORE SUCH DISPOSAL; (B) A CASE WHERE THE ASSESSEE HAS PAID THE FULL AMOUNT OF TAX DEMANDED B Y THE AO PURSUANT TO THE ASSESSMENT ORDER STANDS ON A DIFFER ENT FOOTING FROM A CASE WHERE SUCH DEMAND WAS NOT SATISFIED IN FULL AND DIFFERENT CONSIDERATIONS SHALL APPLY TO SUCH A CASE ; (C) THE ORIGINAL DEMAND MADE BY THE AO ON THE BASIS OF THE ASSESSMEN T ORDER IS MERELY KEPT IN ABEYANCE OR SUSPENSION DURING THE EN TIRE PROCEEDINGS BY WAY OF APPEAL OR REVISION TAKEN AGAI NST THE ASSESSMENT AND GETS REVIVED FROM INCEPTION ONCE THE ASSESSMENT GETS FINALLY CONFIRMED IN THOSE PROCEEDINGS; (D) WH EN THE ASSESSMENT ORDER IS FINALLY AFFIRMED, THE DOCTRINE OF MERGER ALSO APPLIES AND INTEREST BEING COMPENSATORY IN NATURE, THE REVENUE IS ENTITLED TO CHARGE THE SAME FROM THE DATE OF THE OR IGINAL ORDER WHICH MERGED WITH THE FINAL APPELLATE ORDER; (E) AS A COROLLARY TO THE ABOVE, IT FOLLOWS THAT WHERE AN ASSESSMENT IS R ESTORED AND THE ORIGINAL DEMAND GETS REVIVED FROM INCEPTION, THE AS SESSEE IS LIABLE TO PAY INTEREST UNDER S. 220(2) FROM THAT DA TE ON THE UNPAID AMOUNT AND ANY VARIATION IN THE AMOUNT OF THE DEMAN D ITA NO.863/BANG/2011 PAGE 9 OF 11 FAVOURABLE TO THE ASSESSEE WHICH WAS DIRECTED BY AN Y OF THE APPELLATE AUTHORITIES IN THE INTERREGNUM HAS NO EFF ECT ON THE LIABILITY OF THE ASSESSEE TO PAY THE INTEREST ON THE PERIOD FOR WHICH INTEREST U/S.220(2) OF THE ACT HAS TO BE LEVIED, THE HONBLE COURT HELD AS FOLLOWS: 41. THE RESULT OF THE DISCUSSION IS THIS. THE PET ITIONER BEFORE US IS LIABLE TO PAY INTEREST UNDER S. 220(2) ON THE AMOUNT OF TAX DUE FROM HIM ON THE BASIS OF THE ASSESSMENT ORDER P ASSED UNDER S. 143(3) ON 7TH OCT., 1997. THE INTEREST IS PAYABLE F OR THE ENTIRE PERIOD ON THE AMOUNT OF TAX AS COMPUTED IN THE ASSE SSMENT ORDER, FROM NOVEMBER 1997 TILL THE DATE ON WHICH IT WAS AC TUALLY PAID. IN COMPUTING THE INTEREST, NO NOTICE SHALL BE TAKEN OF THE FACT THAT BY VIRTUE OF THE ORDER OF THE CIT(A) THERE WAS A RE DUCTION OF THE TAX LIABILITY FROM THE DATE OF THE SAID ORDER TILL THE DATE ON WHICH THE TRIBUNAL RESTORED THE ASSESSMENT ORDER. HOWEVER , NO INTEREST SHALL BE CHARGED FROM THE ASSESSEE ON THE INTEREST OF RS. 2,58,993, RS. 58,500 AND RS. 26,000 ALLOWED TO THE ASSESSEE U NDER S. 244A ON THE REFUNDS GRANTED TO THE ASSESSEE. THE AO IS D IRECTED TO RECALCULATE THE INTEREST IN THE LIGHT OF OUR DIRECT IONS AND RECOVER THE SAME FROM THE ASSESSEE. 15. IN THE PRESENT CASE, IT IS SEEN FROM THE FACTS OF THE CASE THAT THE DEMAND RAISED BY THE AO PURSUANT TO THE ORDER U/S. 143(3) OF THE ACT DATED 18.11.1996 HAD BEEN FULLY PAID BY THE ASSESSEE INCL UDING INTEREST U/S. 220(2) OF THE ACT. IT IS ALSO SEEN THAT THERE WAS ANOTHER NOTICE OF DEMAND CREATED PURSUANT TO AN ORDER U/S. 143(3) R.W.S. 148 OF THE ACT AND THAT DEMAND NOTICE WAS ISSUED ON 28.04.1997. IT IS SEEN THAT THIS PAYMENT ULTIMATELY GOT WIPED OUT ON 08.10.1997 BECAUSE OF T HE ORDER OF THE ITAT IN ITA NO.778/BANG/1997. IT IS THUS CLEAR AT NO POINT OF TIME THE DEMAND ARISING OUT OF THE ORDER U/S 143(3) R.W.S. 148 WAS SATISFIED BY PAYMENT. SO FAR AS THE DEMAND U/S. 156 OF THE ACT DATED 28.04.1 997 IS CONCERNED, THERE WAS A DEFAULT IN PAYMENT OF TAX DUE TO INTEREST U/S . 220(2) LEVIED FROM THE PERIOD COMMENCING FROM THE EXPIRY OF 30 DAYS FROM T HE DATE OF SERVICE OF ITA NO.863/BANG/2011 PAGE 10 OF 11 NOTICE U/S. 156 OF THE ACT TILL THE DATE ON WHICH T HE TAX IS ACTUALLY PAID BY THE ASSESSEE. WE ARE OF THE VIEW THAT THE CIT(APPE ALS) HAS CONSIDERED THE DEMAND ARISING OUT OF THE ORDER PASSED U/S. 143 (3) OF THE ACT DATED 18.11.1996, WHICH AS ALREADY STATED WAS NEVER THE S UBJECT MATTER OF LEVY OF INTEREST U/S.220(2) OF THE ACCT. THIS ORDER WAS NEVER THE SUBJECT-MATTER OF APPELLATE PROCEEDINGS BEFORE THE TRIBUNAL. THE DIS PUTED DEMAND ARISES ONLY OUT OF THE ORDER U/S. 143(3) R.W.S. 148 OF THE ACT, WHICH CULMINATED IN A DEMAND NOTICE DATED 28.04.1997, WHICH AT NO POINT O F TIME WAS DISCHARGED BY ACTUAL PAYMENT. PURSUANT TO THE ORDER OF THE TR IBUNAL IN ITA NO.258/BANG/97 DATED 10.7.1997, THE DEMAND WAS REVI SED AND THE ASSESSEE GOT A REFUND. THIS CANNOT BE EQUATED WITH ACTUAL PAYMENT OF TAXES DEMANDED IN THE NOTICE OF DEMAND U/S.156 OF T HE ACT. THE ORDER OF THE TRIBUNAL DATED 10.7.1997 IN ITA NO.258/BANG/199 7 MERELY KEPT THE DEMAND IN THE NOTICE U/S.156 DATED 28.4.1997 IN ABE YANCE. WHEN THE HONBLE KARNATAKA HIGH COURT REVERSED THE ORDER OF THE TRIBUNAL, THE DEMAND U/S.156 OF THE ACT DATED 28.4.1997 GOT REVIV ED FROM THE INCEPTION. IN THE CIRCUMSTANCES, THE ASSESSEE WAS NOT ENTITLED TO THE BENEFITS OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F VIKRANT TYRES LTD. (SUPRA) . WE HOLD ACCORDINGLY AND DIRECT THE ASSESSING OFFICE R TO CALCULATE THE INTEREST U/S. 220(2) OF THE ACT AS LAID DOWN IN THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF GIRNAR INVE STMENTS LTD. (SUPRA) AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE. ITA NO.863/BANG/2011 PAGE 11 OF 11 16. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF NOVEMBER, 2012. SD/- SD/- ( N. BARATHVAJA SANKAR ) ( N.V. VASU DEVAN ) VICE PRESIDENT JUDIC IAL MEMBER BANGALORE, DATED, THE 23 RD NOVEMBER , 2012. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.