TMI Blog1997 (9) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows : During the assessment year 1971-72, the petitioner, was a partner in a firm, P. Ramasamy, consisting of three partners. The Income-tax Officer, City Circle IV(8), Madras-6, the second respondent herein, rejected the registration under section 185(1)(b) of the Income-tax Act, 1961 (hereinafter referred to as the "Act"), for the firm P. Ramasamy, and took the view that the petitioner was the owner of the so called firm of P. Ramaswamy in individual capacity and determined the total income at Rs. 6,19,710. The petitioner filed an appeal to the Appellate Assistant Commissioner of Income-tax, Central Range-1, Madras 34. The view taken by the second respondent was confirmed. However, the Appellate Assistant Commissioner gave certai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anuary 8, 1987, in TR No. 128 of 1978-79 on the ground that payments have been made after a long delay. According to the Tax Recovery Officer under rule 5 of the Second Schedule to the Act, interest had to be calculated at the rate of 12 per cent. from October 1, 1983, to September 30, 1984, on the diminishing balance and at the rate of 15 per cent. from October 1, 1984, till the date of complete payment of arrears, He directed the petitioner to pay the said interest of Rs. 9,439 levied under section 220(2) of the Act to be paid immediately. The petitioner filed a petition under section 220(2A) of the Act to the Central Board of Direct Taxes, New Delhi, and contended that the petitioner was facing financial difficulties, and that he paid th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n opportunity of hearing or assigning any reason, by order dated July 27, 1988, refused to entertain the petition with an observation that the matter had already been decided. This order is under challenge. The respondents have not filed any counter. However, learned senior counsel for the respondents supported the order of the first respondent on the basis of materials available. It is seen from the records as follows : By communication TR No. 128 of 1978-79 dated January 8, 1987, the Tax Recovery Officer-I, demanded a sum of Rs. 9,493 as the interest due under rule 5 of the Act. The letter has given the details as to how the amount was arrived at. The petitioner filed an application under section 220(2A) of the Act before the Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not mention as to how the figure was arrived at. It merely stated as follows : "This is to give you notice that for the assessment year 1971-72, a sum of Rs. 49,778/220(2) details of which, are given on the reverse has been determined to be payable by you." The reverse of the said demand notice did not contain any details. Thereafter, the petitioner made an application once again to the first respondent for waiver of interest under section 220(2A) setting out in detail how he was entitled to waiver. This was on December 15, 1987. This was followed by another revised petition for waiver of interest under the Act on June 27, 1988. On July 27, 1988, the first respondent received a communication from the second respondent stating that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0(2A) is a discretionary power and it has been exercised properly by the first respondent and the same cannot be called in question under article 226 of the Constitution of India. I had an occasion to deal with a matter relating to waiver of interest in W. P. No. 4232 of 1988 (R. Seshammal Chidambaram v. CBDT [1998] 234 ITR 585 (Mad)). I held that while exercising discretionary power, the authorities were duty bound to indicate in their order that they had applied their mind in that regard. In Smt. Harbans Kaur v. CWT [1997] 224 ITR 418 (SC), dealing with a case arising under section 18B of the Wealth-tax Act, 1957, the Supreme Court stated as follows : "In exercise of that discretion, the Commissioner can either reduce the amount of pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier order passed by the first respondent, in the application filed by the petitioner for waiver of interest of Rs. 9,493, the first respondent relied on Mahalakshmi Rice Mills v. CIT [1981] 129 ITR 53 (Kar), and held that the petitioner did not co-operate in the matter of payment of tax demand as finally determined by the Income-tax Appellate Tribunal by its order dated April 17, 1984. No doubt, the Karnataka High Court has held that by cooperation, it could mean that the assessee did not resort to any litigation, obstruction or evasive tactics in concluding the assessment and no more. In this case, I do not find any material to show that the writ petitioner had not co-operated with the Department in the matter of assessment. In fact, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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