Court sets aside tax order, grants stay, remands for fresh consideration. Petitioner complies, no costs awarded.

The Court allowed the Writ Petition, setting aside the order under Section 264 of the Income Tax Act and remanding the matter for fresh consideration under Section 220(2A). An interim stay was granted, contingent on the petitioner paying 30% of the interest demanded under Section 220(2). The petitioner's compliance was confirmed, with any payments subject to the first respondent's new orders. No costs were awarded, and the case was closed.

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Issues:
Challenge to order under Section 264 of the Income Tax Act, 1961; Petition for waiver of interest under Section 220(2A) of the Act; Consideration of the petition by the first respondent; Remand for fresh consideration as a petition under Section 220(2A).

Analysis:
The Writ Petition challenges the order passed by the first respondent under Section 264 of the Income Tax Act, 1961, regarding the assessment for the petitioner-Company for the year 1995-1996. The petitioner sought to waive the interest levied under Section 220(2) of the Act and requested a stay on the recovery of interest during the pendency of the Writ Petition. The first respondent rejected the petition, stating that the relief sought was not maintainable under Section 264 as the petitioner did not challenge the chargeability or quantification of interest. However, the petitioner had also filed the petition under Section 220(2A) for waiver of interest, which the first respondent failed to consider adequately.

The Court noted that the petitioner's grounds in the Writ Petition detailed their failure to meet the parameters required under Section 220(2A) of the Act. Therefore, the first respondent should have treated the petition as one under Section 220(2A) for waiver of interest. The Court emphasized that the petition was not seeking revision under Section 264 but solely a waiver under Section 220(2A). Consequently, the Court allowed the Writ Petition, set aside the impugned order, and remanded the matter to the first respondent for fresh consideration specifically as a petition under Section 220(2A) of the Income Tax Act.

Additionally, an interim stay was granted subject to the petitioner paying 30% of the demand towards interest under Section 220(2) of the Act. The petitioner's compliance with this condition was confirmed, and any payment made by the petitioner was to abide by the fresh orders to be passed by the first respondent. No costs were awarded, and the connected Miscellaneous Petition was closed, concluding the matter.

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