1993 (6) TMI 3

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..... , the Tribunal was justified in deleting fully the interest levied under section 215 by holding that under rule 40(1) of the Income-tax Rules, 1962, such interest is to be totally waived and not merely reduced to that leviable for a period up to one year after the submission of the return, for 1966-67 and 1967-68 assessment years ? 2. Whether the Tribunal was justified in holding that under rule 40(5) of the Income-tax Rules, 1962, the waiver of interest was justified and even if so, whether the refusal of the Inspecting Assistant Commissioner to waive interest under rule 40(5) would be tantamount to a refusal by the Income-tax Officer so as to make such an order appealable to the Appellate Assistant Commissioner for 1966-67 assessment ye .....

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..... calculated from the 1st day of April next following the financial year and up to the date of the regular assessment. Section 215(4) speaks of the discretion of the Income-tax Officer to reduce or waive such interest in such cases and circumstances as may be prescribed. Rule 40 of the Income-tax Rules prescribes the cases and circumstances. At the material time, it read thus : "R. 40. Waiver of interest.-- The Income-tax Officer may reduce or waive the interest payable under section 215 or section 217 in the cases and under the circumstances mentioned below, namely : (1) When the relevant assessment is completed more than one year after the submission of the return, the delay in assessment not being attributable to the assessee. (2) Wher .....

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..... he 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 situations and they are independent of each other. Therefore, it cannot be said that sub-rule (5) will not operate in cases governed by sub-rule (1). Rule 40 nowhere limits the discretion, once the conditions are satisfied. To hold otherwise, would amount to rewriting the rule. In our vie .....

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