2011 (5) TMI 818 - HC - Income Tax

Writ Petition - Waiver of interest under Section 220(2A) of the Income Tax Act - Held that - more than a year has lapsed since the filing of that petition. Ext.P3 has been followed up with a reminder Ext.P4 dated 4/1/2011. However, in spite of the above, no orders have been passed by the first respondent so far, Writ Petition is disposed of directing the first respondent to consider Ext.P3 petition filed by the petitioner under Section 220(2A) of the Income Tax Act seeking waiver of interest as expeditiously as possible,

Summary

Issues:
1. Assessment of tax and interest on deceased assessee's wife.
2. Claim for waiver of interest under Section 220(2A) of the Income Tax Act.
3. Delay in passing orders on the waiver petition and initiation of revenue recovery proceedings.

Analysis:

1. The deceased assessee's wife, the petitioner, was assessed for a total tax amount of Rs.40,64,650/-, which was later reduced to Rs.11,19,629/- by the Appellate Authority. Both the assessee and the Revenue appealed to the Income Tax Tribunal, where both appeals were dismissed. The petitioner claimed to have paid the tax assessed, but a demand for Rs.12,13,421/- as interest was made by the 3rd respondent.

2. The petitioner sought waiver of interest under Section 220(2A) of the Income Tax Act by filing a petition (Ext.P3) on 23/4/2010, followed by a reminder (Ext.P4) on 4/1/2011. Despite this, no orders were passed on the waiver petition. The Standing Counsel for the respondents argued that the petitioner's liability for interest remains even after paying the tax, and justified the initiation of revenue recovery proceedings based on her income capacity.

3. The High Court noted the delay in deciding on the waiver petition and criticized the authorities for issuing recovery proceedings (Ext.P6) before resolving the waiver claim. The court emphasized that if the petitioner is eligible for interest waiver, pursuing recovery proceedings would be unnecessary. Consequently, the court directed the first respondent to promptly consider the waiver petition and instructed to halt any further recovery actions until a decision is made on the waiver request.

In conclusion, the judgment focused on the petitioner's plea for interest waiver, highlighting the necessity for timely consideration of such requests to avoid unnecessary recovery proceedings. The court's decision aimed to ensure a fair assessment of the petitioner's claim and prevent undue financial burden until a final determination on the waiver application is reached.