2006 (10) TMI 111 - HC - Income Tax

Summary

Issues involved:
The issues involved in this case are the petitioner seeking relief through a writ petition under article 226 of the Constitution of India to quash an order by the Commissioner of Income-tax and to grant full waiver of interest u/s 220(2A) of the Income-tax Act, 1961.

Relief sought by the petitioner:
The petitioner sought the following reliefs through the writ petition:
(A) Quashing the impugned order dated August 31, 2000, passed by the Commissioner of Income-tax, Agra.
(B) Directing respondent No. 1 to grant full waiver of interest u/s 220(2A) of the Income-tax Act, 1961, amounting to Rs. 4,33,071.
(C) Seeking other suitable writs, orders, or directions as deemed fit by the court.
(D) Awarding costs to the petitioner.

Facts of the case:
A significant income-tax demand was created for assessment years 1972-73 to 1987-88, with interest charged. After appellate and revisional orders, the demand was reduced, resulting in a payable interest amount of Rs. 10,57,877. The petitioner applied for waiver u/s 220(2A) of the Income-tax Act, 1961, before the Commissioner of Income-tax, Agra. The Commissioner waived most of the interest but retained Rs. 4,33,071. This decision was challenged in court, leading to a remand for a fresh order. Subsequently, the Commissioner waived the majority of the interest except the aforementioned sum, citing it as interest paid by the Department under section 244(1A) of the Act.

Court's Decision:
The court heard arguments from both parties and emphasized that the Commissioner has the discretion to either reduce or waive interest u/s 220(2A) of the Act. The court noted that the petitioner had received Rs. 4,33,071 as interest on delayed refund, indicating a liability towards interest on delayed tax payments. Considering this, the court found no legal infirmity in the Commissioner's decision to retain the mentioned amount of interest. Therefore, the writ petition was dismissed for lacking merit.