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TMI Blog2002 (2) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... e for the said sum was accordingly served on the petitioner. The petitioner applied for waiver of interest in terms of section 215 of the Act. The said claim of the petitioner was rejected by an order dated August 24, 1978, whereafter the petitioner filed a revision petition in terms of section 264 of the Act which as noticed hereinabove, was allowed in part. In its impugned order, the second respondent rejected partly the prayer for waiver of interest inasmuch as, interest for a period of 15 months, i.e., for the period April 1, 1975, to June 30, 1976, was not waived and interest for the period for July 1, 1976 to June 21, 1978, was waived. Learned counsel appearing for the petitioner would submit that the Commissioner of Income-tax committed an illegality in passing the impugned order in so far as it proceeded on the basis that the interest could not be fully waived. The petitioner contended that the demand of interest is attributable in full to the additions and disallowance wherefor the petitioner is not responsible and the same was disputed by the petitioner. Learned counsel would contend that sub-rules (1) and (5) of rule 40 of the Income-tax Rules, 1962, are distinct and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o true that in a given case both sub-rules (1) and (5) may be held to be applicable. Be it recorded that the petitioner preferred an appeal against the order of assessment claiming depreciation as also other deductions which were held to be taxable and thus, if and when the said appeal is allowed, the same will have a bearing on the demand also. The question as to whether the delay in assessment is attributable to the assessee having regard to the provisions of sub-rule (1) of rule 40 of the Income-tax Rules would be essentially a question of fact. The Commissioner of Income-tax has arrived at a finding that there was nothing on record to show that the assessee had adopted dilatory tactics for postponement of the assessment proceedings. Allowing interest for a part of the period, although is permissible in law, but in the instant case the Commissioner of Income-tax has not assigned any reason in support of the impugned order. However, we may notice that in J.K. Jute Mills Co. Ltd. v. ITO [1978] CTR 250 (All), a Division Bench of the Allahabad High Court has held that the power of the Commissioner under section 264 is discretionary in nature and the writ court in exercise of pow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation of this sort there is no such thing as absolute and untrammelled "discretion" that is that action can be taken on any ground or for any reason that can be suggested to mind of the administrator ; no legislative Act can, without express language, be taken to contemplate an unlimited arbitrary power exercisable for any purpose, however, capricious or irrelevant, regardless of the nature or purpose of the statute. Fraud and corruption in the Commission may not be mentioned in such statutes but they are always implied as exceptions. Discretion necessarily implies good faith in discharging public duty. There is always a perspective within which a statute is intended to operate and any dear departure from its lines or objects is just as objectionable as fraud or corruption.' 55. In State of U. P. v. Maharaja Dharmander Prasad Singh [1989] 2 SCC 505 ; AIR 1989 SC 997, it has been held: 'It is true that exercise of powers of revoking or cancelling the permission is akin to and partakes of a quasi-judicial complexion and that in exercising of the former power the authority must bring to bear an unbiased mind, consider impartially the objections raised by the aggrieved party and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it by the President of India in terms of article 143(1) of the Constitution of India relating to constitutionality of the Special Courts Bill, 1978, observed: 'The second infirmity from which the procedural part of the Bill suffers is that by clause 7, Special Courts are to be presided over either by a sitting judge of a High Court or by a person who has held office as judge of a High Court to be nominated by the Central Government in consultation with the Chief Justice of India. The provision for the appointment of a sitting High Court judge as a judge of the Special Court is open to no exception. In so far as the alternative source is concerned, we entertain the highest respect for retired judges of High Courts and we are anxious that nothing said by us in our judgment should be construed as casting any aspersion on them as a class. Some of them have distinguished themselves as lawyers once again, some as members of administrative Tribunals and many of them are in demand in important walks of life, unquestionably they occupy a position of honour and respect in society. But one cannot shut one's eyes to the constitutional position that whereas by article 217 a sitting judge of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Pandey, therefore to the effect that this court should not interfere with the order cannot be sustained. In CIT v. Bennett Coleman and Co. Ltd. [1996] 217 FM 216 (Bom) a Division Bench of the High Court has held: "The only requirements of sub-rule (1) are that (a) assessment should have been completed more than one year after the submission of the return and (b) the delay in the assessment is not attributable to the assessee. The rule does not even faintly indicate that where these conditions are satisfied, interest for the first year must be levied. The rule in fact provides for waiver or reduction of interest without any such limitations. No doubt, section 215(1) gives the date from which interest can be charged but the said sub-section cannot be read in isolation. Sub-section (4) cannot be ignored and all parts of section 215 will have to be read harmoniously as a whole. From the general scheme of rule 40, it would be clear that under sub-rule (5) the Inspecting Assistant Commissioner has the widest power in the matter of waiver of interest with no statutory limitations or conditions prescribed for its exercise. All the five sub-rules of rule 40 deal with different situat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al power under section 264 could not have given any discretionary relief as provided in sub-rule (5), which discretion could be exercised only by the Inspecting Assistant Commissioner. Furthermore, the impugned order does not contain sufficient or cogent reason. Assignment of reason, as is well known is a part of the principle of natural justice. In Siemens Engineering and Manufacturing Co. of India Ltd. v. Union of India, AIR 1976 SC 1785, wherein the apex court held: "If courts of law are to be replaced by administrative authorities and Tribunals, as indeed, in some kinds of cases, with the proliferation of Administrative law, they may have to be so replaced, it is essential that administrative authorities and Tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently dear and explicit reasons in support of the orders made by them. Then alone administrative authorities and Tribunals exercising quasi-judicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process. The rule requiring reasons to be given in support of an order is, li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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