ORDER SHEET ITA No. 212 of 2005 IN HIGH COURT AT CALCUTTA SPECIAL JURISDICTION (INCOME TAX) ORIGINAL SIDE C.I.T. KOLKATA-I Versus SIMPLEX PROPERTIES & TRADING (P) LTD. BEFORE: Hon'ble JUSTICE SOUMITRA PAL Hon'ble JUSTICE DEBANGSU BASAK Date : 9th September, 2014. Appearance: Mr. P. Dudhoria, Adv. Court :- This appeal under Section 260A of Income Tax Act, 1961 has been preferred by Appellant/Revenue against order dated January 17, 2005 passed by Income Tax Appellate Tribunal B Bench, Calcutta in I.T.A. Nos. 645 & 646/KOL/2004 for Assessment Year 1988-1989 on following questions:- [i] Whether on facts and in circumstances of case, Tribunal was justified in holding that interest under Section 220(2) was to be charged with effect from 20.12.2002 i.e. date on which fresh demand notice was served and not from 18.3.1991 when original demand notice was issued? [ii] Whether on facts and in circumstances of case, Tribunal was right in upholding order of Commissioner 2 of Income Tax (Appeal) to charge interest with effect from service of fresh demand notice when said section clearly states that where as result of order under Section 250 amount of interest payable is reduced, interest shall be reduced accordingly? [iii] Whether Tribunal was right in upholding order of Commissioner of Income Tax (Appeal) when circular of CBDT clarifies that interest under Section 220(2) is chargeable from order date of original assessment after giving effect to Tribunal s order? [iv] Whether Tribunal was justified in holding that no penalty can be imposed in facts of present case as assessee cannot be said to be in default due to non-adjustment of refund with demand by Assessing Officer? [v] Whether there was any material before Tribunal to hold that assessee was not in default in making payment of tax and there by holding that no penalty under Section 221 can be imposed? So far as first question is concerned, it is apparent that fresh demand notice was served on 20th December, 2002 which obliterate original demand notice dated 18th March, 1991. Therefore, in view of issuance of fresh demand notice interest should be charged with effect from 20th December, 2002 and not from 18th March, 1991. 3 So far as other question is concerned, we find that Tribunal in penultimate paragraph of order had held as under:- Similarly, in view of penalty provisions which were not initiated on basis of adjustments remaining to be completed by Assessing Officer, learned CIT (A) rightly considered that not having completed adjustments of refund due to assessee in various assessment years with interest as applicable under law demand of assessment year 1988-89 could not be treated against assessee for being in default to initiate penalty provisions u/s 220(1). Therefore, on both issue revenue s agitation fails and appeals filed are dismissed. Since learned Tribunal, ultimate fact finding authority, had found that proceedings were pending and assessee could not be treated to be in default to initiate penalty proceedings, we are of view that no substantial question of law arises. Therefore, application and appeal are dismissed. (SOUMITRA PAL, J.) (DEBANGSU BASAK, J.) snn. C.I.T. Kolkata I v. Simplex Properties & Trading (P) Ltd