Section 220(2) Interest Invalid Without Section 156 Demand Notice: ITAT Mumbai

Samsara Shipping Pvt. Ltd. Vs ITO (ITAT Mumbai) The ITAT Mumbai held that levy of interest under Section 220(2) is impermissible in the absence of a valid demand notice under Section 156. Though the Assessing Officer determined total income at Rs. 204.90 crore, the demand notice issued along with the assessment order specified “zero” demand and even computed a refund. It is well settled that without a valid demand notice, no demand is enforceable and the assessee cannot be accused of violating Section 220(1). The subsequent rectification order under Section 154 created demand only at a lat...