Interest waiver discretion must rest on reasons; partial refusal without justification cannot stand when statutory conditions are met.

When the statutory conditions for waiver of interest were found satisfied, the competent authority was required to exercise discretion on relevant reasons and could not restrict relief without explaining the basis for doing so. The record showed that the assessee's business had virtually closed, he was heavily indebted, the default arose from circumstances beyond his control, and he had cooperated in assessment proceedings. In the absence of any reason for limiting relief to 50%, the partial refusal of full waiver was unsustainable. The order was quashed to the extent it denied complete relief, and full waiver of interest was granted.

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Issues: Whether the Commissioner was justified in granting only partial waiver of interest under section 31(2A) of the Wealth Tax Act, 1957 when the statutory conditions for waiver were found satisfied.

Analysis: The authority had recorded findings that the assessee's business was virtually closed, that he was heavily indebted, and that payment of interest would cause genuine hardship. The material on record also showed that the default was due to circumstances beyond the assessee's control and that he had co-operated in the assessment proceedings. Once these statutory conditions stood satisfied, the discretion under section 31(2A) had to be exercised judiciously and on sound reasons. Where the application was allowed only in part, the order was required to disclose reasons for declining complete waiver. In the absence of any reason for restricting relief to 50%, the partial rejection could not be sustained. Given the age of the matter and the fact that no disqualifying circumstance was shown, remand was considered unnecessary.

Conclusion: The partial refusal of complete waiver was unsustainable and the assessee was entitled to full waiver of interest.

Final Conclusion: The writ petition succeeded, the impugned order was quashed to the extent it denied full relief, and the interest waiver was granted in entirety in favour of the assessee.

Ratio Decidendi: When the statutory prerequisites for waiver of interest are satisfied, the competent authority must exercise its discretion on relevant reasons, and a partial refusal without reasons cannot stand.

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