2011 (7) TMI 529 - HC - Income Tax

Waiver of interest charged u/s 220(2)- delay in payment of the tax - Held that - It is settled law that all the three conditions prescribed in section 220(2A) are to be satisfied cumulatively for making eligible a case for waiver of interest under section 220(2) - None of the conditions is satisfied - Therefore this is not a fit case for waiver of the interest - application for waiver of interest u/s 220(2A) for the A.Y. 2006-07 rejected.

Summary

Issues:
1. Challenge to assessment and waiver of interest under Section 220(2A) of the Income Tax Act.
2. Calculation of interest on interest and compliance with conditions for waiver.

Issue 1: Challenge to assessment and waiver of interest under Section 220(2A) of the Income Tax Act:
The petitioner, an assessee under the Income Tax Act, challenged the assessment in appeals which were dismissed, leading to the payment of the entire amount due. Seeking waiver or reduction of interest under Section 220(2A), the petitioner's petition was rejected for not satisfying the conditions for eligibility. The petitioner argued that obtaining stays during appeals did not constitute non-cooperation in tax collection proceedings. The Income Tax Department countered, stating that obtaining a stay did not halt the accrual of interest on defaulted tax, and the petitioner failed to prove genuine hardship or circumstances beyond their control. The court analyzed the petitioner's contentions and the Department's opposition, emphasizing the cumulative satisfaction of conditions under Section 220(2A) for interest waiver.

Issue 2: Calculation of interest on interest and compliance with conditions for waiver:
The petitioner contended that interest was calculated on interest in Ext.P2, which was disputed. The court found no evidence of interest on interest being charged and noted the petitioner's failure to dispute the interest charged in a timely manner. The court upheld the decision denying the petitioner's benefit under Section 220(2A) due to non-satisfaction of conditions, including genuine hardship and circumstances beyond control. The court dismissed the writ petition, finding no merit in the petitioner's arguments regarding interest calculation and waiver eligibility.

In summary, the judgment addressed the challenges to assessment, waiver of interest under Section 220(2A), and the calculation of interest on interest. It emphasized the need for the petitioner to satisfy all conditions for interest waiver and found no grounds for interference with the decision denying the waiver.