Law:

Section:

Section 220 of the Income-tax Act, 1961 - Collection and recovery of tax - When tax payable and when assessee deemed in default - Assessment years 1980-81 to 1982-83 - Whether it will be law as prevailing on date of demand for payment of interest that will govern a case - Held, yes - Whether when section 220(2A) was introduced into statute with effect from 1-10-1984, before which date not only had assessment for relevant assessment years been framed, but even notices of demand had been served on assessee, said section would not be applicable to assessee's case - Held, yes FACTS For the assessment years 1980-81 to 1982-83, the revenue issued demand notices to the assessee-company on 30-3-1983, 27-4-1983 and 27-4-1983 respectively. As the assessee was under a bona fide belief that it was entitled to some additional relief under the unamended provisions of section 80J, it moved the Supreme Court through a writ petition in the course of the hearing of which the operation and effect of the amended provisions of section 80J had been stayed. The assessee also filed an application for stay of the demand which was allowed by the IAC. However, on 25-1-1985, the Supreme Court dismissed the writ petition upholding the validity of the retrospective amendment to section 80J. Thereupon, the assessee paid the pending demands. Subsequently, the revenue issued a notice to the assessee demanding interest under section 220(1) for the period prior to 25-1-1985. The assessee filed an application for waiver of interest which was rejected by the Commissioner. In the instant writ petition, the assessee contended that inasmuch as interest had been charged for the period prior to 25-1-1985 till which date the interim orders of the Supreme Court were effective, the demand was palpably illegal; and that the impugned order was liable to be set aside since it was not afforded any opportunity of personal hearing. HELD The first contention of the assessee had only to be stated to be rejected forthwith, as it was devoid of all merits. The assessee was one amongst several others who had challenged the vires or the retrospective operation of section 80J. [Para 3] There is always a presumption in…

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