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TMI Blog2009 (5) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... writ to waive the interest levied under Section 220 (2) of the Income Tax Act, 1961 (IT Act for short) pertaining to three consecutive years in respect of which the original Demand had already been paid. The Petitioner has contended that for the Assessment Years 1980-81, 1981-82 and 1982-83, the Revenue has raised a demand of Rupees 2,84,546/-, Rupees 6,95,479/- and Rupees 15,23,079/- respectively in regard whereof Demand Notices were served on 30.03.1983, 27.04.1983 and 27.04.1983 respectively. The Petitioner was under a bonafide belief that he was entitled to some additional relief under the unamended provisions of Section 80-J of the IT Act. As a consequence it had moved the Hon'ble Supreme Court of India through a writ petition in the course of the hearing of which the operation and effect of the amended provisions of Section 80-J of the IT Act had been stayed. The Petitioner had also moved applications dated 08.04.1983 and 25.05.1983 for the stay of the aforesaid Demand; and the same was stayed by the Inspecting Assistant Commissioner vide his letters dated 12.04.1983 and 01.06.1983 for a period of six months. These interim orders were further extended till 31.03.1985 vide or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey challenge the validity of rule 19A of the I.T. Rules, 1962, and also call in question the constitutionality of the retrospective amendment made in s.80J, by the Finance (No.2) Act, 1980". The contention is that in the interregnum when interim orders passed by the Court were in operation it insulated the Petitioner from all claims on account of interest. 4. It should not be forgotten that there is always a presumption in favour of the constitutionality or legality or validity of a statute. In the present case, this presumption was, in fact, eventually vindicated. There was no embargo or impediment, whatsoever, on the Petitioner to pay the assessed tax without prejudice to the outcome of its petition pending in the Supreme Court. Had that been done, it would have certainly removed and eradicated the liability for payment of interest. We find it legally preposterous to suggest that the liability to pay tax is not just postponed but is totally neutralized in the duration of interim orders. The argument that interest could not be charged till the dismissal of the writ petition (which coincided with the withdrawal of interim orders) is summarily rejected, it being devoid of merits. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter were completed on 30.3.83, 27.4.83 & 27.4.83 respectively and the demands of Rs.2,84,456/-, Rs.6,95,470 & Rs.15,23,076/- were created. The demand notice in respect whereof were served on the assessee company on 30.3.83, 27.4.83 and 27.4.83 respectively". The factual foundations are contrary to the case now projected on behalf of the Petitioner. State of Kerala vs. Joy Varghese, 1999 STC 657 has no application since Demand Notices have been served. In view of the extracted admission, we also consider it unnecessary at this late stage to investigate into the question as to whether or not the Demand Notices adhered to Form No.7. Certainly, this precise objection has not been ventilated prior to the stage of final arguments. This submission is accordingly rejected. 6. We shall now consider the legal propriety of the impugned Order dated 2.8.1995 declining to waive the interest which reads thus:- Subject :- Waiver of Interest u/s 220(2A) of the Income-tax Act, 1961 - regarding I am directed to refer to your petition No. NIL dated 1-3-85 on the subject mentioned above and to say that your petition has been considered by the Board. It is regretted that your request cannot be acced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 220(2A) came into force, it would be the date on which the Assessment had crystallized that would be relevant. Inasmuch as Demand Notices were served on 30.03.1983, 27.04.1983 and 27.04.1983 for the three years in question, the said provision would not be available. 9. On behalf of the Petitioner reliance has been placed on Kishan Lal vs. Union of India, [1998] 230 ITR 85 wherein their Lordships have enunciated the law in these words:- When an application is filed under Sub-section (2A) of Section 220 the authority concerned is called upon to take a quasi judicial decision. If it is satisfied that the reasons contained in the application would bring the case under Clauses (i) (ii) and (iii) of Section 220(2A) then it has the power either to reduce or waive the amount of interest. Even though in the said Sub-section it is not stated that any reasons are to be recorded in the order deciding such an application, it appears to us that it is implicit in the said provision that whenever such an application is filed the same should be decided by a speaking order. Principles of natural justice in this regard would be clearly applicable. It will be seen that a decision which is taken by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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