The Tax Publishers2020 TaxPub(DT) 5503 (Karn-HC) : (2021) 277 TAXMAN 0414

INCOME TAX ACT, 1961

Section 220(2)

Where Tribunal held that interest under section 220(2) was not chargeable during the period of stay, finding of Tribunal was perverse as the levy of interest under section 220(2) is prescribed by the statute and when stay is granted to a party, it is always subject to a statutory provision and it is well settled in law that mere grant of stay does not prevent the running of the interest.

Recovery - Interest under section 220(2) - Interest, whether chargeable during the period of stay -

Revenue challenged order of Tribunal holding that interest under section 220(2) was not chargeable during the period of stay, as the same was against the provisions of Income Tax Act, where the stay was sought by the assessee and not given suo moto by AO. Held: The levy of interest under section 220(2) is prescribed by the statute. When stay is granted to a party, it is always subject to a statutory provision and it is well settled in law that mere grant of stay does not prevent the running of the interest. Therefore, finding recorded by Tribunal that the interest under section 220(2) of the Act is not chargeable during the period of stay is perverse as the interest is mandatorily leviable under section 220(2).

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2007-08



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