1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR -------------------------------------------------------- (1) INCOME TAX APPEAL No. 126 of 2008 C.I.T.BIKANER V/S M/S RAJESH KUMAR DINESH KUMAR (2) INCOME TAX APPEAL No. 57 of 2008 C.I.T., BIKANER V/S M/S. LAL CHAND PREM CHAND Mr. KK BISSA, for the appellant / petitioner Date of Order : 10.11.2008 HON'BLE SHRI N P GUPTA,J. HON'BLE SHRI KISHAN SWAROOP CHAUDHARI,J. ORDER ----- Both these appeals have been filed by the Revenue against the common order of the learned Tribunal dated 20.7.2007, and therefore, are being decided by this common order. It is contended that the learned Tribunal was in error in holding that interest under Section 220(2) can be awarded only from the due date of demand notice issued for the reframed assessment order on the amount finally determined as taxable, and not from the due date of the original assessment order. 2 The necessary facts in brief are, that the Assessing Officer made a block assessment vide order dated 28.5.1998, that assessment was set aside by the Tribunal, and the matter was sent back to the Assessing Officer to examine the matter afresh. Thereafter, the assessment was again made for the same income. Again that order was set aside by the Tribunal vide order dated 31.3.2005, and the matter was restored to the file of the Assessing Officer with certain directions. Thereafter, the Assessing Officer passed a fresh assessment order determining the total undisclosed income at Rs.35,63,120/-. It may be noticed that earlier the income determined was at Rs.1,56,36,101/-. The question that arise and arose before the Tribunal was, as to whether the interest on this amount of Rs.35,63,120/- is required to be computed from the date, the amount became due pursuant to the original assessment order dated 28.5.1998, or from the date when it became due pursuant to the fresh assessment order passed after remand. The learned Tribunal found relying upon the Circular No.334 dated 3.4.1982 that the matter is covered by para 2(i) thereof. Learned counsel for the Revenue contends that the matter is covered by para 2(ii) thereof and not sub-para (i). In order to appreciate the contentions, we may gainfully quote the para 2 of the said Circular in its 3 entirety, which reads as under:- “2. These issues were comprehensively examined in consultation with the Ministry of Law and the Board has been advised: (i) where an assessment order is cancelled under section 146 or cancelled/set aside by an appellate/revisional authority and the cancellation/setting aside becomes final (i.e. it is not varied as a result of further appeals/revisions), no interest under section 220(2) can be charged pursuant to the original demand notice. The necessary corollary of this position will be that even when the assessment is reframed, interest can be charged only after the expiry of 35 days from the date of service of demand notice pursuant to such fresh assessment order. (ii) where the assessment made originally by the Income-tax Officer is either varied or even set aside by one appellate authority but, on further appeal, the original order of the Income-tax Officer is restored either in part or wholly, the interest payable under section 220(2) will be computed with reference to the due date reckoned from the original demand notice and with reference to the tax finally determined. The fact that during an intervening period, there was no tax payable by the assessee under any operative order would make no difference to this position.” After going through the said paras, it is clear that sub-para (ii) becomes applicable only in the eventuality, where the original assessment order is varied, or set aside by the Appellate Authority, and on further appeal the original order of the Assessing Officer is restored, either wholly or in part. In the present case, it is not shown that the original assessment order was at all 4 restored on further appeal against the order of the Tribunal, whether dated 31.3.2005, or the earlier one, whether wholly or in part, rather undisputedly that order of the Tribunal became final, and it was only in compliance of the order of the Tribunal, that fresh assessment order was passed. In our view, in that event, the matter is squarely covered by the later part of sub-para (i), which comprehends a situation, where even when the assessment is reframed pursuant to setting aside of the order by the appellate Court. Learned counsel for the appellant relied upon the judgment of Hon'ble the Supreme Court in Vikrant Tyres Ltd. Vs. First Income Tax Officer, Mysore reported in (2001)3 SCC 76. Even after going through that judgment, we are of the view that, that judgment rather goes against the Revenue, and supports the impugned order of the Tribunal, instead of supporting the contentions of the Revenue. Thus, this contention doesn't hold good. So far as the other two questions framed in the appeals are concerned, having gone through the earlier order of the Tribunal dated 31.3.2005, which was made available for our perusal, in our view, we do not find any error in the finding recorded by the Tribunal. 5 The appeals thus, have no force and are dismissed summarily. ( KISHAN SWAROOP CHAUDHARI ),J. ( N P GUPTA ),J. /tarun/