1989 (10) TMI 1 - SC - Income Tax

Orders made by the CBDT, declining to waive the demand of interest made by the ITO, u/s 220(2) - Notice was issued in the special leave petitions confined to the question as to whether the petitioner was entitled to a hearing before the Board declined to exercise its power - personal representation before Board is not necessary - Since SLP was pending for more than two years petitioner would be prejudiced, if it was required to move HC first - therefore SLP is dismissed

Summary

Issues:
Application under article 136 against orders declining to waive interest demand under section 220(2) of the Income-tax Act for assessment years 1979-80 and 1982-83. Entitlement to a hearing before the Board declined to exercise its power. Maintainability of petitions under article 136 instead of approaching the High Court.

Analysis:
The judgment pertains to two applications under article 136 challenging orders by the Central Board of Direct Taxes declining to waive interest demands under section 220(2) of the Income-tax Act for the assessment years 1979-80 and 1982-83. The Income-tax Officer raised demands for interest based on the law, considering the sustained demands for the two years. The petitioner sought waiver under section 220(2A) which allows the Board to reduce or waive interest if payment would cause genuine hardship, default was beyond the assessee's control, and cooperation was shown in related proceedings.

The judgment discusses the discretionary nature of the power under section 220(2A) and the absence of a statutory requirement for a hearing in its disposal. It highlights that natural justice can be assumed unless excluded by clear provision or inferred from the scheme and nature of the power. In this case, the Board's decision was based on the Commissioner's report, and the petitioner had the opportunity to represent its case in writing. The court concluded that a personal hearing was not necessary in this situation, given the nature of the power exercised and the petitioner's opportunity to present its case.

Regarding the maintainability of the petitions under article 136, the Revenue objected, arguing that the petitioner should have approached the High Court first. However, the court declined to examine this aspect due to the pending nature of the case and the potential prejudice to the petitioner if required to move the High Court at that stage. Consequently, both petitions were dismissed, with no order as to costs.

In conclusion, the judgment addresses the issues of waiver of interest demands under the Income-tax Act, entitlement to a hearing before the Board, and the proper forum for filing petitions. It emphasizes the discretionary nature of the Board's power under section 220(2A) and the absence of a mandatory requirement for a personal hearing in every case. The decision to dismiss the petitions under article 136 was based on the circumstances of the case and the potential prejudice to the petitioner if redirected to the High Court at that stage.