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2017 (11) TMI 578 - HC - Income TaxStay petition - demand for payment of interest under Section 220(2) - recovery proceedings - non cooperation in proceedings - whether the petitioner satisfies the condition prescribed under Section 220(2A)? - visible financial hardship - Held that:- Merely because the petitioner approached this Court and filed a writ petition, they cannot be put to prejudice nor can it be treated that the petitioner did not co-operate in the proceedings. Therefore, the condition no (iii) contained in Section 220(2A) stands complied with. With regard to other two facts, to be fulfilled for the entitlement of waiver, namely genuine hardship and circumstances beyond the control, the second respondent has interpreted the clause in the freight rate agreement dated 09.06.1987 and concluded that it is a self-inflicted injury by the petitioner. In my view, the second respondent has no jurisdiction to sit in judgment over a condition contained in an agreement between two parties viz., two Government organization and that cannot be put against the petitioner. Thus, the manner in which the second respondent has approached the issue is in-correct. With regard to financial difficulty, the second respondent would state that the petitioner has a fixed deposit of a sum of ₹ 4.4 Crores and they also earned interest income and the said fixed deposit is maintained specifically in connection with Kanniyakumari ferry service, which is a matter of national importance and the fixed deposit has to be maintained for the purpose of acquiring the ferry and cannot be diverted for any other purpose. Thus, the observation with regard to financial condition of the petitioner is also factually in-correct. Thus, for the above reasons, this Court has no hesitation to hold that the petitioner has fulfilled all the three conditions contained under Section 220(2A) of the Act and thus, entitled for waiver of interest. Writ petition is allowed and the impugned order is quashed. It is seen that at the time, when the writ petition was allowed, an order of interim stay was granted on condition that the petitioner pays 25% of the amount demanded within a period of eight weeks. This condition has been complied with by the petitioner. In the light of the above order, the petitioner is entitled for refund of the said amount and this amount can be adjusted against the future assessments.
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