2017 (8) TMI 128 - HC - Income Tax

Revision u/s 264 in favor of assessee - Charging of interest u/s 220(2) - Waiver of interest u/s 220(2A) - Held that - the petitioner has not only filed a Petition under Section 264 of the Act, but, it is under Section 220(2A) of the Act as well. Therefore, the first respondent could have very well treated the Petition, as a Petition for waiver under Section 220(2A) of the Act, as the Commissioner has been empowered to deal with such Petition by the Central Board. In fact, the petitioner has set out in the grounds of this Writ Petition, as to how, they failed to fulfill the parameters, required to be complied with under Section 220(2A) of the Act. Therefore, the first respondent should have considered the said Petition, by treating it as Petition under Section 220 (2A). Therefore, considering the factual situation, it is clear that the petitioner sought for waiver under Section 220 (2A) and it is not revision under Section 264 for revising the earlier order passed by the Assistant Commissioner or for that matter. Hence, this Court is of the view that the matter requires to be re-considered by the first respondent, by treating the Petition as purely a Petition under Section 220(2A) of the Income Tax Act. Writ Petition is allowed, the impugned order is set aside and the matter is remanded to the first respondent for fresh consideration, who shall consider the Petition filed by the petitioner, dated 23.01.1999, as purely a Petition under Section 220 (2A) of the Act and decided the same, in accordance with law. It is seen that, at the time, when the Writ Petition was entertained, order of interim stay was granted on 06.10.2003, subject to the condition that the petitioner pays 30% of the impugned demand towards interest under Section 220(2) of the Act

Summary

Issues:
Challenge to order under Section 264 of the Income Tax Act, 1961; Petition for waiver of interest under Section 220(2A) of the Act; Consideration of the petition by the first respondent; Remand for fresh consideration as a petition under Section 220(2A).

Analysis:
The Writ Petition challenges the order passed by the first respondent under Section 264 of the Income Tax Act, 1961, regarding the assessment for the petitioner-Company for the year 1995-1996. The petitioner sought to waive the interest levied under Section 220(2) of the Act and requested a stay on the recovery of interest during the pendency of the Writ Petition. The first respondent rejected the petition, stating that the relief sought was not maintainable under Section 264 as the petitioner did not challenge the chargeability or quantification of interest. However, the petitioner had also filed the petition under Section 220(2A) for waiver of interest, which the first respondent failed to consider adequately.

The Court noted that the petitioner's grounds in the Writ Petition detailed their failure to meet the parameters required under Section 220(2A) of the Act. Therefore, the first respondent should have treated the petition as one under Section 220(2A) for waiver of interest. The Court emphasized that the petition was not seeking revision under Section 264 but solely a waiver under Section 220(2A). Consequently, the Court allowed the Writ Petition, set aside the impugned order, and remanded the matter to the first respondent for fresh consideration specifically as a petition under Section 220(2A) of the Income Tax Act.

Additionally, an interim stay was granted subject to the petitioner paying 30% of the demand towards interest under Section 220(2) of the Act. The petitioner's compliance with this condition was confirmed, and any payment made by the petitioner was to abide by the fresh orders to be passed by the first respondent. No costs were awarded, and the connected Miscellaneous Petition was closed, concluding the matter.