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Issues:
1. Interpretation of section 220(2A) of the Income-tax Act regarding waiver of interest. 2. Applicability of waiver provisions to periods before and after specific amendment dates. 3. Limitation on the Commissioner's discretion in granting waiver relief. Analysis: Issue 1: Interpretation of section 220(2A) of the Income-tax Act regarding waiver of interest The petitioner challenged the Commissioner's order declining to waive interest for the period up to 1984 and limiting the waiver to 50% for subsequent periods. The petitioner argued that the word "paid" in section 220(2A) should allow waiver for all amounts paid, regardless of the period, and that "payable" should include all outstanding amounts irrespective of the period. The court analyzed the legislative intent behind the provision, noting that the power to waive interest was granted only from October 1, 1984, and not retrospectively. The addition of the term "paid" in 1987 aimed to prevent honest assessees from being denied relief, not to extend the waiver power retrospectively. The court emphasized that statutory provisions are generally prospective, and a substantive power is not meant to be exercised for past periods unless explicitly stated. Issue 2: Applicability of waiver provisions to periods before and after specific amendment dates The court clarified that section 220(2A) is not clarificatory or declaratory but a substantive provision granting the authority the power to waive interest. It distinguished procedural provisions from substantive ones, highlighting that a substantive power introduced for the first time should not be applied retrospectively unless expressly provided. Referring to precedents, the court upheld the Commissioner's decision that the power to waive interest did not extend to periods before October 1, 1984, to prevent a flood of claims by assessees who had paid interest prior to that date. Issue 3: Limitation on the Commissioner's discretion in granting waiver relief Regarding the Commissioner's decision to limit the waiver to 50%, the petitioner cited a recent apex court decision requiring full waiver when all conditions are met. However, the court found that the Commissioner had not established fulfillment of all conditions and had valid reasons for limiting the relief. The court held that the Commissioner's discretion in granting 50% waiver was within the law and should not be interfered with through the writ petition. Citing precedent, the court emphasized that discretionary orders of the Commissioner should not be overturned through writ petitions acting as appeals. In conclusion, the court dismissed the writ petition, denying relief to the petitioner and upholding the Commissioner's decision. No costs were awarded, and a related application was also dismissed.
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