Interest waiver for belated returns denied where delay was unexplained and prior years' defaults gave no automatic entitlement.

The Commissioner's refusal to waive interest for belated returns was upheld because the assessee's explanations were not shown to justify the continuing delay over several years. The earlier tax raid and delay in finalising accounts were not established as the cause of the defaults for the assessment years in question, and the death of a partner was held insufficient to excuse the later delay. Prior belated filings did not create any automatic entitlement to waiver for subsequent years, and a separate waiver granted for later years on different facts did not render the present order arbitrary. The refusal was therefore neither arbitrary nor based on irrelevant considerations.

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Issues: Whether the Commissioner's refusal to waive interest under section 139 of the Income-tax Act, 1961, for the relevant assessment years was arbitrary, based on irrelevant considerations, or liable to be interfered with.

Analysis: The assessee relied on the earlier raid by the Income-tax Department and the delay in finalising accounts, but the delay in filing the returns continued over several years and was not shown to be attributable to that raid for the assessment years in question. The Commissioner had considered the explanation tendered for the belated returns and found it unacceptable. The demise of a partner was also held to be an insufficient basis for excusing the delay in filing the return for the later assessment year. The fact that returns for earlier years had also been filed belatedly did not create an automatic entitlement to waiver for subsequent years. The separate waiver granted for later assessment years on a different factual basis did not vitiate the present order.

Conclusion: The refusal to waive interest was neither arbitrary nor based on irrelevant considerations, and the writ petitions were not liable to succeed.

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