June 2012
Waiver of interest: Section 220(2A) of Income-tax Act, 1961: A.Y. 1989-90: Power to waive should be exercised judiciously: Finding that all conditions for waiver were satisfied: Waiver of part interest is not valid.
By K. B. Bhujle, Advocate
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[E. M. Joseph v. CCIT, 342 ITR 379 (Ker.)]
For the A.Y. 1989-90, the assessee made an application for waiver of interest of Rs.1,95,570 u/s.220(2A) of the Income-tax Act, 1961. The Chief Commissioner gave the finding that all the three conditions regarding genuine hardship to the assessee, default in tax being not due to the circumstances attributable to the assessee and the co-operation of the assessee were satisfied. However, the Chief Commissioner limited the waiver to an amount of Rs.24,408 which was the balance amount due from the assessee.
The Kerala High Court allowed the writ petition filed by the assessee and held as under: “
(i) The Commissioner had found that all the three conditions were satisfied. In the order, the Commissioner merely said that “payment of further interest will cause hardship to them” and did not state any reason for limiting or reducing the waiver.
(ii) The discretion has not been properly exercised by the Commissioner. His order was liable to be quashed to the extent it failed to consider waiver of the amounts already paid.
(iii) The Chief Commissioner was to pass fresh order in accordance with the observations.”
