O R D E R

PER SANDEEP SINGH KARHAIL, J.M.

The assessee has filed the present appeal against the impugned order dated 12.06.2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeal) – 53, Mumbai [“learned CIT(A)”], which in turn arose from the order passed under section 154 of the Act, for the assessment year 2021-22.

2. In this appeal, the assessee has raised the following grounds: -

“1. The Ld. CIT (Appeals) on the facts and circumstances of the case and in law has erred in upholding interest u/s 220 of the Income Tax Act, 1961, when the demand has crystalized only after the order u/s 154 has been passed on 13.05.2025

2. The Ld. CIT (Appeals) on the facts and circumstances of the case and in law has erred in partially accepting the charge of interest under Section 234C by directing the AO to compute interest u/s 234C on the basis of tax due on returned income.”

3. During the hearing, the learned Authorised Representative (“learned AR”) wishes not to press the ground pertaining to the levy of interest under section 234C of the Act. Accordingly, the said ground is dismissed as not pressed.

4. The solitary grievance of the assessee, in the present appeal, pertains to the computation of interest under section 220(2) of the Act.

5. We have considered the submissions for both sides and perused the material available on record. The brief facts of the case are that for the year under consideration, the assessee filed its return of income under section 139(4) of the Act on 30.03.2022, declaring total income of Rs. 9,44,59,940/-. The return filed by the assessee was processed vide intimation dated 29.06.2022, issued under section 143(1) of the Act, accepting the returned income of the assessee and raising a demand of Rs. 2,97,33,970/-. Subsequently, the assessee filed a rectification application under section 154 of the Act, in view of the settlement of its appeals for assessment years 2013-14 and 2018-19 under the Direct Tax Vivad Se Vishwas Scheme, 2024. The Assessing Officer (“AO”), vide order dated 13.05.2025 passed under section 154 of the Act, revised the assessed income of the assessee for the year under consideration at Rs. 7,71,35,481/-, after taking into consideration the resolution of tax dispute by the assessee for the assessment years 2013-14 and 2018-19 under the Direct Tax Vivad Se Vishwas Scheme, 2024. While computing the demand, inter alia, the AO levied interest under section 220(2) of the Act at Rs.1,01,09,550/-

6. From the perusal of the record, we find that no breakup of the computation of interest levied under section 220(2) of the Act was provided to the assessee along with the order passed under section 154 of the Act.

7. During the hearing, the learned AR submitted that since the assessee’s income has been reduced from Rs. 9,44,59,940/- to Rs. 7,71,35,481/-, the interest under section 220(2) of the Act should be correspondingly reduced. The learned AR further submitted that the said interest under section 220(2) of the Act also needs to be computed from the date of passing of the rectification order under section 154 of the Act and not from the date of processing of the return vide intimation issued under section 143(1) of the Act. On the other hand, the learned Departmental Representative (“learned DR”) vehemently relied upon the order passed by the lower authorities.

8. Having considered the submissions from both sides and perused the material available on record, from the plain reading of the provisions of section 220(2) of the Act, we find that the assessee is liable to pay simple interest at the rate prescribed, if the amount specified in the demand notice issued under section 156 of the Act is not paid within the prescribed period. In the present case, there is no dispute regarding the fact that the returned income of the assessee was accepted vide intimation issued under section 143(1) of the Act, and a demand of Rs. 2,97,33,970/- was r