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Issues:
Challenge to order under section 215 of the Income-tax Act, 1961 and revisional powers of the Commissioner of Income-tax. Analysis: The petitioner-assessee challenged the orders dated February 14, 1979, and March 15, 1980, passed by the Income-tax Officer under section 215 and the Commissioner of Income-tax, respectively. The petitioner submitted returns for the assessment year 1975-76, revising the total income. The Income-tax Officer rectified the assessment order under section 154, revising the total income. Subsequently, interest was levied under section 215, leading to the petitioner's objection. The Commissioner partially allowed the revision application, leading to the challenge of both orders in the petition. The petitioner contended that both the Income-tax Officer and the Commissioner misconstrued the law. The Income-tax Officer proceeded on the basis that interest levy under section 215 is mandatory when advance tax paid is less than 75%. The Commissioner's decision was based on specific grounds related to the waiver or reduction of interest. The petitioner relied on a court decision to argue that the Income-tax Officer can exercise power under rule 40 without a specific request from the assessee. The court analyzed the differences between rule 40 and rule 117A, emphasizing that rule 40 does not require prior approval for reducing or waiving interest. The Commissioner's grounds for not allowing reduction or waiver of interest were deemed invalid by the court. The court also highlighted the lack of provision in rule 40(1) regarding the period for which interest should be charged, contrary to the Commissioner's interpretation. Citing a decision by the Madras High Court, the court concluded that none of the grounds for interest levy by the Income-tax Officer and the Commissioner were valid. Consequently, the court quashed the impugned orders and ruled in favor of the petitioner, allowing the petition and setting aside the orders without costs.
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