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- Correctness and legality of the order passed by the Commissioner of Income-tax under section 264 of the Income-tax Act, 1961. - Application of mind by the Commissioner for waiver of interest under section 220(2A) of the Act. Analysis: The judgment involves a challenge to the order passed by the Commissioner of Income-tax under section 264 of the Income-tax Act, 1961. The petitioner, an assessee, had filed a revision petition against an order demanding interest under section 220(2) of the Act. The main contention raised was that the Commissioner failed to apply his mind to the case for waiver of interest under section 220(2A) of the Act. The petitioner argued that the satisfaction of all three conditions under section 220(2A) was necessary for reducing or waiving the interest. The Commissioner had the discretion to revise an order passed by a subordinate authority, and this power was considered judicial or quasi-judicial in nature, requiring careful consideration of facts and circumstances. The judgment delves into the legal provisions governing the Commissioner's power to revise orders and grant relief to the assessee, emphasizing the need for sound discretion in the interest of justice. The judgment further discusses the interpretation of section 220(2) and 220(2A) of the Act in the context of the case. It highlights the requirement for the assessee to pay simple interest if the specified amount in a notice of demand is not paid within the stipulated period. The petitioner contended that since a refund was ordered by the Tribunal, the respondents were not entitled to recover interest under section 220(2). Legal precedents, including decisions of the Supreme Court and High Court, were cited to support both the petitioner's and the Department's arguments regarding the validity of the demand for interest under the Act. The judgment scrutinizes the Commissioner's reasoning for dismissing the revision petition and concludes that there was no infirmity in the order as the Commissioner was not satisfied with the conditions for waiving interest under section 220(2A). Moreover, the judgment addresses the concept of an order prejudicial to the assessee under section 264 of the Act. It explains that the Commissioner cannot pass an order prejudicial to the assessee and must exercise his revisional power judiciously. The judgment refers to legal principles and past decisions to elucidate the meaning of an order prejudicial to the assessee and the statutory provisions governing such orders. The Commissioner's observations regarding the assessee's failure to pay the tax on time, lack of genuine financial hardship, and non-cooperation in tax recovery proceedings were considered in determining the validity of the order passed under section 264. Ultimately, the judgment upholds the Commissioner's decision, finding no grounds for interference or any miscarriage of justice, and confirms the dismissal of the revision petition. In conclusion, the judgment dismisses the writ petition challenging the Commissioner's order under section 264 of the Income-tax Act, 1961. It emphasizes the limitations on the court's power to interfere with such orders and underscores the importance of complying with statutory provisions and legal principles in matters of tax assessment and revision. The detailed analysis provided in the judgment elucidates the legal complexities involved in revising tax orders and the considerations that govern the waiver of interest under the Act.
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