This appeal by assessee is directed against order dt. 6th May, 1982 passed by CIT (A)-VI Bombay. By notice of demand dt. 28th Dec., 1976 under s. 156 of IT Act, 1961, ITO called upon assessee to pay amount of Rs. 1,62,414 within 35 days of service of said notice. It was mentioned therein that if assessee did not pay amount within period specified in notice, he would be liable to pay interest at 12 per cent annum from date commencing after end of period aforesaid, in accordance with s. 220(2) of IT Act. This notice was served on assessee on 29th Jan., 1977. It appears that ITO modified demand by order under s. 154 of Act. By said modification, credit for Rs. 27,931, was given in respect of self-assessment tax paid by assessee. By letter dt. 14th March, 1977, ITO intimated that challan for Rs. 1,31,671 was being sent. He directed assessee to make payment within stipulated time, i.e., within 35 days of receipt of challan. assessee paid amount on 24th March, 1977. Even so, ITO levied interest of Rs. 3,248 under s. 220(2) of Act on amount of Rs. 1,62,414 for period from 29th Jan., 1977 to 31st March, 1977. assessee filed appeal against said order. CIT (A) dismissed appeal on ground that order of levying interest under s. 220(2) was not appealable, because there was no challenge to assessment which had given rise to tax demand. assesses has now come in further appeal before us and two contentions have been raised. first is that order was appealable as assessee had challenged very liability to pay interest and had not challenged mere quantum of interest. second is that whole interest. second is that whole interest should have been deleted by CIT (Appeals). ld. departmental representative contends that order is not appealable and relies on decision of High Court of Bombay in CIT vs. Daimler Benz. A. G. 1977 CTR (Bom) 568 (FB): 108 ITR 961, (Bom) (FB) which has been followed in subsequent appeals. decision in case of Daimler Benz (supra) deals with question as to in what circumstances order under s. 18A of IT Act, 1922 for charging interest was appealable. ration of that decision would be relevant for considering question as to in what circumstances order charging interest under s. 220(2) of IT Act, 1961, would be appealable. relevant observations in said decision are as follows: "...........An assessee can prefer appeal to AAC against his regular assessment and urge all contentions which, if accepted, must result in ITO holding that there was no liability to pay advance tax and, therefore, there was not liability to penal interest, or, even in appeal preferred against order charging penal interest, it would be open to him to raise contention that income in respect of which interest is calculated for purpose of s. 18A(8) was not income which fell under head covered under s. 18A or he could contend that income calculated by ITO as income of assessee for relevant years was not proper income and that there was no income at all or income was less than income calculated." ratio is that if challenge is to very liability to pay any interest, appeal would lie, but if challenge is to quantum of interest, appeal would not lie. In present case, challenge is to very liability to pay interest. contention of assessee is that original demand notice was served on 29th Jan., 1977, but by letter dt. 14th March, 1977, fresh demand was made and it was demand made by that letter which was to be satisfied. demand made earlier was for incorrect amount and when fresh demand for correct amount was made, earlier demand stood superseded. assessee complied with revised demand within stipulated time and, as such, there was not liability to pay any interest. There is thus challenge to very liability to pay any interest and not to mere quantum of interest levied. In circumstances, appeal was maintainable. On merits, it is obvious from what has been stated above that amount h s been paid within stipulated period and as such no interest was chargeable under s. 220(2) of Act. order of levy of interest is liable to be and is hereby cancelled. In result, appeal is allowed. *** VENUS ENGG. WORKS & FOUNDRY (P) LTD. v. INCOME TAX OFFICER