1997 (9) TMI 53 - HC - Income Tax

Summary

Issues:
1. Whether the writ petitioner is entitled to the benefit of section 220(2A) of the Income-tax Act, 1961 for waiver of interest.
2. Whether the first respondent's rejection of the petition for waiver of interest was justified.
3. Whether the order of the first respondent dated March 25, 1987, should be quashed and remanded to the second respondent for reconsideration.

Analysis:
1. The writ petitioner sought the benefit of section 220(2A) of the Income-tax Act, 1961, for waiver of interest due to non-payment of tax caused by the Department's failure to release seized jewellery. The petitioner argued that she met the conditions for waiver and that the Department's actions caused hardship. The respondents contended that the Voluntary Disclosure Scheme did not cover interest under section 220(2) and justified the rejection of the waiver application based on non-compliance with the scheme's requirements.

2. The first respondent's order, rejecting the petition for waiver of interest, was challenged by the writ petitioner. The petitioner argued that the first respondent did not consider the grounds raised for waiver and failed to provide reasons for the decision. The court found merit in the petitioner's argument, stating that the first respondent did not demonstrate consideration of the petitioner's entitlement to waiver under section 220(2A). The court held that the rejection lacked proper reasoning and remanded the matter to the second respondent for reconsideration.

3. The court quashed the first respondent's order dated March 25, 1987, and directed the second respondent to review the petitioner's claim for interest waiver in accordance with the court's observations. The court clarified that the powers under section 220(2A) were now vested in the second respondent, necessitating reconsideration of the petitioner's case. The court allowed the writ petition, emphasizing the importance of authorities providing reasons for their decisions. The stay petition was dismissed in light of the main writ petition's outcome.