Judicial exercise of interest waiver discretion under section 234C requires reasoned decision-making, not presumptions or ipse dixit.

Discretionary waiver of interest under section 234C must be exercised judicially on relevant reasons, not on surmises, presumptions or an ipse dixit. Where the recorded reasons for refusing full waiver made it unclear what weight was given to unsupported assumptions, the order could not stand on its existing reasoning. The High Court therefore set aside the partial waiver order and directed the Commissioner to reconsider the matter afresh.

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Issues: Whether the order granting only partial waiver of interest under section 234C of the Income-tax Act, 1961 was sustainable when the discretion was exercised on surmises and presumptions, and whether the matter required fresh consideration.

Analysis: Waiver of interest is discretionary, but the discretion must be exercised judicially and not as an ipse dixit. The reasons recorded for refusing full waiver disclosed reliance on presumptions, and it was unclear what weight those assumptions had in reaching the final decision. In these circumstances, the order could not be sustained on its existing reasoning.

Conclusion: The order was set aside and the matter was directed to be reconsidered afresh by the Commissioner.

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