2013 (2) TMI 428 - HC - Income Tax

Reduction or waiver of Interest - waiver of interest to the extent of 50% - Held that - petitioner has various assets in her name and also has many income there from, the Commissioner has not satisfied that the petitioner was eligible for the full waiver. Such exercise of discretionary power of the Commissioner cannot said to be perverse warranting interference in a proceedings under Article 226 of the Constitution of India There waiver up to 50 % allowed However amount due shall be permitted to be paid in five equal monthly instalments Accordingly writ petition disposed.

Summary

Issues:
1. Application for waiver of interest under Section 220(2A) of the Income Tax Act.
2. Denial of full benefits of waiver.
3. Interpretation of conditions under Section 220(2A).
4. Exercise of discretionary power by the Commissioner.
5. Petitioner's request for an instalment facility.

Analysis:
1. The petitioner applied for a waiver of interest under Section 220(2A) of the Income Tax Act, seeking relief from the interest due. The Commissioner granted a 50% waiver through order Ext.P8, which led to the filing of a writ petition due to dissatisfaction with the extent of the waiver granted.

2. The main contention raised was that the petitioner had fulfilled the conditions specified in Section 220(2A) but was denied full benefits. The court examined Ext.P8 order and the provisions of Section 220(2A) to determine the legality of the Commissioner's decision. It was concluded that there was no illegality in the Commissioner's decision to grant a 50% waiver based on the assessment of the petitioner's circumstances.

3. Section 220(2A) outlines the conditions for reducing or waiving interest payable by an assessee, including genuine hardship, circumstances beyond the assessee's control for default in payment, and cooperation in assessment inquiries. Legal precedents were cited to emphasize that all three conditions must be met for claiming the waiver benefit.

4. The Commissioner's decision-making process was scrutinized, where it was noted that the petitioner was found eligible for the benefit of Section 220(2A) due to facing genuine hardship. However, considering the petitioner's assets and income, a full waiver was deemed inappropriate, leading to a 50% reduction in interest. The court upheld the Commissioner's discretionary power in this regard, stating that it was not perverse to warrant interference under Article 226 of the Constitution of India.

5. Despite upholding Ext.P8, the petitioner sought an instalment facility to settle the liability. After hearing submissions, the court directed that the interest amount be paid in five equal monthly instalments, with the first installment due by a specified date. It was clarified that any default in payment would allow the bank to take legal action for recovery.

This comprehensive analysis addresses the issues raised in the legal judgment, providing a detailed examination of the application for waiver, denial of full benefits, interpretation of statutory provisions, exercise of discretionary power, and the grant of an instalment facility for payment.