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2012 (4) TMI 71 - HC - Income TaxInterest under Section 220(2) - Application u/s 220(2A) - learned standing counsel appearing for the respondents submit that from the pleadings itself it is obvious that this is a case where the grounds mentioned in section 220(A) were not cumulatively made out and that in spite of it partial waiver has been granted - the order does not contain any reason why the first respondent has limited the waiver only to 1/3rd of the interest levied - Held that the interest should be limited 1/3rd of what is levied on the petitioner - petition is disposed of
Issues: Challenge against Ext.P2 order for partial waiver of interest under Section 220(2A) of the Income Tax Act.
Analysis: 1. The petitioner, an assessee under the Income Tax Act, filed returns for assessment years 1993-1994, 1994-1995, and 1995-1996, with assessments completed in 2000. The first respondent levied interest under Section 220(2) amounting to Rs.7.40 lakhs. The petitioner sought waiver of interest under Section 220(2A) through an application, resulting in Ext.P2 order granting only 1/3rd of the interest waiver. 2. The petitioner argued that since the first respondent accepted the grounds for waiver under Section 220(2A), the interest should have been waived in its entirety. Conversely, the standing counsel for the respondents contended that the grounds for cumulative waiver under Section 220(A) were not fully met, justifying the partial waiver in Ext.P2 order. 3. The court examined Ext.P2 order and noted that the first respondent exercised power under Section 220(2A) indicating satisfaction with the grounds for waiver presented by the petitioner. However, the order lacked reasoning for limiting the waiver to 1/3rd of the interest. The petitioner's representative had raised factual issues to support full interest waiver, which were not addressed in Ext.P2 order. 4. Considering the circumstances and the prior levy of interest under section 234(A, B, and C) of the Act, the court deemed it just to limit the interest to 1/3rd of the amount levied on the petitioner. Consequently, the writ petition was disposed of, modifying Ext.P2 to specify that the interest levied on the petitioner should be only 1/3rd of the Rs.7.40 lakhs imposed under Section 220(2) of the Income Tax Act.
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