2010 (10) TMI 43 - HC - Income Tax

Waiver of interest - section 220(2A) - Held that - The CIT-A has not applied its mind on any of the three conditions mentioned in section 220(2A) of the Act but has dismissed it on the ground that the assessee did not appear before him in support of the application and on the basis of the circular. - Matter remanded back

Summary

Issues:
1. Assessment of income for the year 1991
2. Appeal against the assessment order
3. Application for waiver of interest under section 220(2A) of the Income Tax Act, 1961

Analysis:
1. The petitioner initially declared an income of Rs. 1,80,910 for the assessment year 1991, but the Assessing Officer increased it to Rs. 20,55,490 through an order dated 29.3.1993. The petitioner then filed an appeal against this order, which was allowed by the Commissioner of Income Tax (Appeals) on 14.4.1993. Subsequently, the Income Tax Department filed an appeal against the CIT-A's order, resulting in the assessment of the petitioner's income at Rs. 13,72,836 on 12.2.2007, followed by the calculation of tax and interest on this amount.

2. The petitioner filed an application under section 220(2A) of the Income Tax Act, 1961, seeking a waiver of interest on 5.4.2007. However, this application was dismissed on 31.3.2010. The court noted that the CIT-A did not consider the conditions specified in section 220(2A) before dismissing the application, instead basing the decision on the petitioner's absence during the proceedings and a circular. The court emphasized that the key aspect in deciding such applications is whether the conditions outlined in the section are met, and failure to appear before the CIT-A should result in dismissal for non-prosecution or after assessing compliance with the specified conditions.

3. Consequently, the court quashed the order dated 31.3.2010 and directed the petitioner to appear before the CIT-A in the specified week with the certified copy of the order. The CIT-A was instructed to reconsider the application in accordance with the law. The writ petition was allowed with these observations, emphasizing the importance of assessing the fulfillment of conditions specified in section 220(2A) for granting a waiver of interest under the Income Tax Act, 1961.