1998 (6) TMI 34 - HC - Income Tax

Summary

Issues:
1. Writ petition seeking a writ of certiorarified mandamus to waive interest for the assessment year 1984-85.
2. Validity of interest levied under section 215 of the Income-tax Act.
3. Whether the principles of natural justice were violated.
4. Nature of the order passed by the second respondent.
5. Request for remand for fresh disposal.

Analysis:
1. The petitioner filed a writ petition under Article 226 seeking a writ of certiorarified mandamus to waive interest for the assessment year 1984-85. The main contention was that the interest levied by the second respondent under section 215 of the Income-tax Act was disputed by the petitioner.

2. The petitioner argued that the interest levied was unjust as the second respondent did not provide an opportunity before passing the order. It was contended that failure to give such an opportunity violated the principles of natural justice. The petitioner relied on various judgments, including Malayalam Plantation's case and M. G. Bros.'s case, to support the claim that a penalty without prior opportunity is against the law.

3. The petitioner further contended that the order for levying interest should be a speaking order with proper reasons provided. However, in this case, the order was deemed as a non-speaking order, lacking justification. The petitioner argued that the absence of reasons in the order amounted to a violation of natural justice principles, warranting the order to be quashed.

4. Additionally, the petitioner highlighted the delay in completing the assessment, which led to a substantial amount of interest being levied. It was argued that without the fault of the petitioner, such a penalty was unjust and contrary to law and justice. Therefore, the petitioner requested a remand to the second respondent for a fresh disposal after affording sufficient opportunity.

5. The High Court, after considering the arguments and material available, concluded that justice would be served by remanding the matter to the second respondent for fresh disposal. The court refrained from delving into the merits extensively to avoid interfering with the jurisdiction of the authorities. The writ petition was allowed, the impugned order was quashed, and the second respondent was directed to dispose of the matter within ninety days while providing an opportunity to the petitioner.