2021 (3) TMI 127 - HC - Income Tax

Waiver of Interest - Whether an Assessee defaulter of payment of demand raised as per the assessment order can claim waiver u/s 220(2A) - Assessment u/s 153A / 153C - HELD THAT - Section 234A to C deals with charging of interest for default of furnishing return of income, payment of advance tax and interest on the deferment of the advance tax. The aforementioned proceedings have not been disputed by the petitioner except the modification in the appeal, preferred, against the assessment order. The demand of interest raised by the revenue was in accordance with the statutory provisions of the Act, which the petitioner failed to countenance with any direct and cogent evidence, except bald and vague plea of hardships.From the cumulative reading of the contents of the applications it is revealed that the applications were filed at the drop of the hat just to avail the remedy as provided under the Act, whereas the conditions enumerated therein are mutually to be complied with and not exclusive u/s 220(2A) of Act, 1967. None of the conditions as enumerated in Section 220 (2A) have been complied with the petitioner enabling to seek waiver of interest in accordance with law. The orders under challenge are not vitiated or there is a gross error apparent on the face, much less, erroneous or without application of mind. I may put caveat to the observations reflected in the impugned order that no materials has been placed on record regarding the income from other sources. The writ petition is accordingly dismissed.

Summary

Issues:
1. Whether an Assessee defaulter of payment of demand raised as per the assessment order can claim waiver under Section 220(2A) of the Income Tax Act, 1969 or not.

Analysis:
The writ petition involved a partner in a business facing demands of income tax along with interest under various sections of the Income Tax Act. The petitioner challenged the orders initiating proceedings under Section 220(2A) for waiver of interest, which were subsequently dismissed by the respondent. The petitioner argued that funds were arranged from multiple sources to remit the demanded amounts, enabling a claim for waiver. However, the respondent contended that the conditions for waiver of interest were not met, citing case law to support their position.

The total tax demanded and interest levied for different assessment years were presented in a table. The petitioner had remitted a substantial amount to meet the demands, including funds from the sale of assets. The respondent argued that the conditions for waiver of interest were not cumulatively satisfied, and no substantial material was provided to counter the Commissioner's observations regarding income from other sources.

The Court analyzed the provisions of Section 220(2A) of the Income Tax Act, which allow for the reduction or waiver of interest under specific conditions. Referring to case law, the Court emphasized that all conditions must be met for the waiver to be granted. The Court found that the petitioner failed to demonstrate genuine hardship or circumstances beyond their control, as required by the statute. The Court concluded that the orders under challenge were not vitiated and dismissed the writ petition, noting the lack of evidence regarding income from other sources.

In summary, the Court held that the petitioner did not meet the necessary conditions for claiming waiver of interest under Section 220(2A) of the Income Tax Act. The Court emphasized the importance of fulfilling all conditions for the waiver to be granted and dismissed the writ petition due to the lack of evidence supporting the petitioner's claims.