2004 (12) TMI 57 - HC - Income Tax

Application for waiver of interest rejected by Commissioner assessee contend that there is a failure to exercise the jurisdiction vested in the Commissioner - We are not satisfied that the petitioner has fulfilled the conditions (i) and (iii) to warrant the exercise of discretion conferred under section (2A) of section 220 of the Act to waive the amount of interest payable - We find that sufficient reasons have been given in support of the conclusions arrived at by the learned Commissioner in his order under appeal. Order impugned is a reasoned one and does not suffer from any legal infirmity. The petitioner, having failed to satisfy the conditions prescribed under sub-section (2A) of section 220 of the Act, is not entitled to the relief as prayed for.

Summary

Issues:
Challenge to Commissioner's order under section 220(2A) of the Income-tax Act regarding waiver of interest for assessment year 1996-97.

Analysis:
The judgment of the High Court of Andhra Pradesh involved a challenge by the petitioner-assessee against the order of the Commissioner of Income-tax (Central), Hyderabad, under section 220(2A) of the Income-tax Act, 1961, regarding the rejection of a waiver petition. The petitioner had paid interest amounting to Rs. 4,25,69,676 under section 220(2) for the period from December 1998 to March 2002. Section 220(2A) empowers the Chief Commissioner or Commissioner to reduce or waive interest if certain conditions are met, including genuine hardship to the assessee, default beyond the assessee's control, and cooperation in related inquiries. The court emphasized that the discretion to waive interest is limited by these conditions.

The court clarified that in exercising judicial review under Article 226 of the Constitution of India, it does not function as an appellate court but ensures the authority has acted lawfully, considering relevant material and principles of natural justice. The petitioner's counsel argued that the Commissioner's order lacked proper consideration of the petitioner's contentions and application for interest waiver, alleging a failure to exercise jurisdiction. Conversely, the Revenue's counsel contended that the order was reasoned and legally sound, as the petitioner did not meet the conditions under section 220(2A) for relief.

Upon reviewing the impugned order and representations by both parties, the court found the Commissioner's decision to be reasoned and legally valid. It noted that the petitioner had not fulfilled the conditions necessary for interest waiver under section 220(2A), specifically regarding genuine hardship and cooperation. The court upheld the Commissioner's decision, stating that sufficient reasons supported the conclusion, and there was no justification for interference. Consequently, the writ petition was dismissed, with no costs awarded.

In conclusion, the High Court's judgment affirmed the Commissioner's decision regarding the waiver of interest under section 220(2A) of the Income-tax Act, emphasizing the importance of meeting prescribed conditions for such relief and upholding the principles of natural justice in administrative decisions.