Prior application for waiver of interest is mandatory before revisional challenge to levy under the Income-tax Rules.

Interest levied under sections 139(8) and 215 of the Income-tax Act is capable of waiver or reduction by the Income-tax Officer under rules 117A and 40 of the Income-tax Rules. A revisional challenge to such levy cannot be examined on merits unless the assessee first applies to the proper Income-tax Officer for waiver or reduction, in line with the Supreme Court principle requiring prior resort to the statutory remedy. The assessee remains entitled to seek such relief, and the applications must then be decided on merits after hearing the assessee, without being influenced by the Commissioner's order.

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Issues: Whether the assessee could seek revision against levy of interest under sections 139(8) and 215 of the Income-tax Act, 1961, without first applying to the Income-tax Officer for waiver or reduction of interest, and what relief, if any, should follow.

Analysis: The levy of interest under section 139(8) is capable of waiver or reduction by the Income-tax Officer under rule 117A of the Income-tax Rules, 1962, and interest under section 215 is similarly amenable to waiver or reduction under rule 40. In view of the Supreme Court ruling that the assessee must first approach the concerned Income-tax Officer and only thereafter invoke revisional jurisdiction, the challenge to the Commissioner's order could not be examined on merits in the absence of such prior application. At the same time, the assessee was held entitled to move the proper authority for consideration of waiver or reduction.

Conclusion: The petitions were disposed of by directing the assessee to file appropriate applications before the Income-tax Officer within one month, whereupon they would be considered on merits without being influenced by the Commissioner's order, and with an opportunity of hearing to the assessee.

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