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Manoj Kumar Gupta Versus Commissioner of Income Tax And Others

2015 (12) TMI 113 - ALLAHABAD HIGH COURT

Reduction of interest payable under Section 220(2) to 25% - entitlement for complete waiver of the interest - Held that:- In the facts and circumstances, the authority had applied its mind to the situation while granting 75% waiver of the interest. It is not correct to state that the Commissioner did not apply its mind though we do find that proper reasoning has not been given. However, by not giving such proper reasoning it does not mean that the order is incorrect or is liable to be set aside. .....

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r which was paid. Consequently, interest was liable to be paid under Section 220(2) of the Act.

Considering the peculiar facts and circumstances of the present case, we find that the original demand was reduced to ₹ 75,000/-. However, the interest component under Section 220(2) of the Act has swelled to ₹ 4.77 lacs. According to the learned counsel for the petitioner, the interest as on date would be ₹ 1,19,353/- as per the impugned order. We find that for the assess .....

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ated:- 24-11-2015 - Hon'ble Tarun Agarwala And Hon'ble Vinod Kumar Misra,JJ. ORDER ( Per: Tarun Agarwala, J. ) 1. We have heard Sri Nikhil Agrawal, the learned counsel for the petitioner and Sri Manu Ghildiyal, the learned counsel for the Income Tax Department. 2. The present dispute relates to the order passed by the Commissioner of Income Tax, Varanasi under Section 220(2A) of the Income Tax Act (hereinafter to referred as the "Act") reducing the interest payable under Sectio .....

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needs to be stated that a huge tax demand was created by the Income Tax Officer for the Assessment Year 1994-95, which the petitioner contested upto the Tribunal. Interest was also charged in the assessment order. After culmination of the appeal, the tax demand was reduced to ₹ 75,000/- which was paid by the petitioner on 27.9.2000. Interest was not paid. The assessing officer, after giving full effect to the appellate order reduced the demand to ₹ 75,000/- on which interest was calc .....

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me on 31.7.2008, declaring total income of ₹ 1,08,300/-, which interalia, include income from salary of ₹ 1,40,400/- for working with M/s. Varuna Bearing (P)Ltd. Therefore, it is to some extent apparent that payment of a sum of ₹ 4,77,412/- may cause some amount of hardship to the assessee when the assessee has essentially Salary Income. 4.3.2 Default in payment of such amount on which interest is payable was due to circumstances beyond the control of the assessee. The assessee .....

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reunder: "We are of the opinion that where all the three conditions are found to be satisfied, the CIT would be failing to exercise his jurisdiction, in reducing or waving amount of interest paid or payable by the assessee. In this case the CIT, in our opinion, failed in exercise of the jurisdiction in reducing or waiving the amount of interest, which was without doubt, much larger as against the demand of tax. The writ petition is allowed. The order dated 26.2.2009 passed by the Commission .....

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ill be passed, within three months." 6. Pursuant to the said decision, the Commissioner reconsidered the matter and, by an order dated 23.3.2012, reduced the payment of interest by 75% and, accordingly, directed the petitioner to pay the interest to the extent of 25% under Section 220(2) of the Act. The petitioner, being aggrieved, by the said decision has filed the present writ petition contending that in the given circumstances, when all the ingredients contemplated under Section 220(2A) .....

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ndia, AIR 1967 SC 1427 and Kishan Lal vs. Union of India and another, 230 ITR 85 on the issue that the order of the authority under Section 220 (2A) of the Act being a quasi judicial order could be subjected to judicial review and that it was imperative for the authority to give reasons while disposing of the application. It was also held that where the the statute gives a discretion to an authority to exercise its power, such authority could exercise the same in a fair manner. 8. Having heard t .....

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hardship for the petitioner, granted partial waiver by reducing the interest to 75%. 9. We are of the opinion that, in the facts and circumstances, the authority had applied its mind to the situation while granting 75% waiver of the interest. It is not correct to state that the Commissioner did not apply its mind though we do find that proper reasoning has not been given. However, by not giving such proper reasoning it does not mean that the order is incorrect or is liable to be set aside. We a .....

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