Court upholds rejection of waiver application for tax interest under Income-tax Act section 220(2)

The court upheld the Chief Commissioner of Income-tax's rejection of the petitioner's application for waiver of interest under section 220(2) of the Income-tax Act. The petitioner's delay in tax payment and lack of cooperation with the Department led to the dismissal of the claim, as the Chief Commissioner independently reviewed the matter and made a decision based on assessment records. Despite citing relevant case law, the court found no grounds to overturn the rejection and dismissed the petition without costs.

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Issues:
Challenge to rejection of application for waiver of interest under section 220(2) of the Income-tax Act, 1961 for belated payment of income-tax for the assessment year 1985-86.

Analysis:
The petitioner challenged exhibit P7, where the Chief Commissioner of Income-tax rejected the application for waiver of interest levied under section 220(2) of the Income-tax Act. The petitioner's income mainly came from a partnership firm in the form of a bar hotel. The firm's assessment revision resulted in a tax demand revision in the petitioner's name, causing a delay in tax payment. The petitioner argued that instead of considering the matter independently under section 220(2A), the Chief Commissioner referred to the report of the Commissioner of Income-tax and dismissed the claim.

The Revenue's standing counsel argued that the Commissioner forwarded the report from the Assessing Officer, containing only factual information about the petitioner's conduct. The petitioner cited the Supreme Court's decision in Kishan Lal v. Union of India, emphasizing that a quasi-judicial authority should independently consider claims under section 220(2) and issue a speaking order. The Chief Commissioner, as per exhibit P7, did not rely on any lower authority's opinion but collected facts from assessment records through the Assessing Officer and made a decision independently.

The petitioner delayed tax payment for ten years and six months and did not cooperate with the Department in settling arrears. Based on the factual findings in exhibit P7, the court found no justification to interfere with the rejection of the application. The court dismissed the petition without costs.

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