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Issues involved:
The issues involved in this case include the levy of penalties under section 271(1)(c) of the Income-tax Act, 1961, cancellation of penalties by the Tribunal, demand for interest under section 220(2) of the Act, and the applicability of Taxation Laws (Amendment) Act, 1984, specifically section 220(2A). Levy of Penalties and Cancellation by Tribunal: The petitioner, an assessee under the Income-tax Act, was penalized by the Inspecting Assistant Commissioner for the assessment years 1964-65 and 1965-66. The Tribunal initially cancelled the penalties, but later reinstated them in compliance with the court's order, leading to the revival of the demands issued by the Income-tax Officer. The legal effect of the Tribunal's order rendered the original notices of demand valid and enforceable. Demand for Interest under Section 220(2): The petitioner challenged the Income-tax Officer's orders demanding interest on the penalties levied. The court found that interest accrued under section 220(2) of the Act from the date of default in payment, and the petitioner was liable for the interest for the relevant period as per the legal provisions. Applicability of Taxation Laws (Amendment) Act, 1984 - Section 220(2A): The petitioner sought relief under section 220(2A) introduced by the Taxation Laws (Amendment) Act, 1984. However, the court noted that this section confers discretion on the Board, requiring the petitioner to approach the Board through the Commissioner for relief. The court held that the legal representatives could avail of this provision by following the prescribed procedure. In conclusion, the court dismissed the writ petitions, directing each party to bear their own costs. The judgment emphasized the legal validity of the demands issued by the Income-tax Officer, the accrual of interest under section 220(2), and the procedural requirements for seeking relief under section 220(2A of the Act.
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