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Issues:
- Quashing of order rejecting application for waiver of interest under section 220(2A) of the Income-tax Act, 1961 - Consideration of waiver/reduction of interest payable under section 220(2) based on genuine hardship and circumstances beyond control - Discrepancies in refund processing by departmental authorities leading to delayed benefits for the assessee - Direction to consider the matter afresh and pass an appropriate order Analysis: The judgment pertains to a Government company seeking to quash the order rejecting its application for waiver of interest under section 220(2A) of the Income-tax Act, 1961. The company had faced resource constraints and filed for stay of realisation of the demand. The assessment was revised, reducing the demand amount. The petitioner made payments through refunds and actual payments, eventually satisfying the demand. The company sought waiver of interest under section 220(2), which was rejected, leading to the petition. The court analyzed the provisions of sections 215 and 220(2) of the Act, highlighting the differences in the stages of tax liability determination and payment defaults. It emphasized that waiver/reduction considerations for interest payable under these sections differ based on the circumstances. The judgment outlined the conditions for waiver/reduction under section 220(2A), requiring the assessee to prove genuine hardship, default beyond control, and cooperation in inquiries. The court addressed the petitioner's claim of hardship and delay in refund processing by the department, suggesting that delayed refunds could justify a reduction in interest payable under section 220(2). It directed the Commissioner of Income-tax to reconsider the matter, considering the discussions in the judgment and providing an opportunity for the petitioner to be heard. The judgment highlighted the importance of timely refund processing for the assessee's financial benefit. In conclusion, the court allowed the writ petition, directing the Commissioner to review the matter afresh. It also mentioned the option for the petitioner to avail of the Kar Vivad Samadhan Scheme, 1998, for resolving tax disputes. The judgment clarified the petitioner's entitlement to adjust the payment made pursuant to the interim order while availing of the scheme. The judgment was passed without costs, with agreement from the other judge on the bench. This detailed analysis of the judgment provides insights into the legal considerations, procedural aspects, and the court's directions regarding the waiver of interest under the Income-tax Act, emphasizing the importance of fair treatment and timely processing of refunds for taxpayers.
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