Pending interest waiver application to be decided within a fixed time, with recovery stayed until then

A pending waiver application for interest under section 217 of the Income-tax Act was required to be decided within a fixed time, and the assessee was protected from recovery meanwhile. The High Court did not examine the merits of the challenge to the vacating of the interim stay, but directed the authority to decide the waiver application within three months of service of the order. Recovery of the impugned interest was restrained until that decision, or for three months, whichever was earlier.

---

---

Issues: Whether the pending application for waiver of interest under section 217 of the Income-tax Act required a time-bound decision, and whether recovery of the impugned interest should be restrained until such decision.

Analysis: The application for waiver had not yet been decided, and the Court declined to enter into the merits of the challenge to the vacating of the interim stay. In view of the pendency of the waiver application, the Court directed the authority to decide the application within three months of service of the order and protected the petitioner from recovery of the impugned interest for that period or until the application was decided, whichever was earlier.

Conclusion: The authority was directed to decide the waiver application within the stipulated time, and recovery of the impugned interest was restrained until then or for three months, whichever was earlier.

---