Interest waiver under Section 220(2A) granted where statutory hardship, lack of control, and cooperation were all established.

Interest waiver under Section 220(2A) requires the assessee to satisfy three cumulative conditions: genuine hardship, circumstances beyond its control, and cooperation in the proceedings. The Court found those conditions met because the assessee had cooperated, the demand and assessment position had remained unsettled for years due to repeated rectifications, and the undertaking had remained under control for a long period without effective control by the assessee. It also held that the later receipt of refund interest under Section 244(1A) was an irrelevant reason for rejecting hardship for the earlier year. The rejection of waiver was therefore unjustified, and waiver of interest was warranted.

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Issues: Whether the assessee satisfied the statutory conditions for waiver of interest under Section 220(2A) of the Income-tax Act, 1961.

Analysis: Waiver under Section 220(2A) requires the assessee to establish cumulatively that payment of interest would cause genuine hardship, that the default occurred due to circumstances beyond its control, and that the assessee cooperated in the relevant proceedings. The assessee had cooperated in the assessment process. The Court held that the reasons given for rejecting genuine hardship were unsustainable because the refund interest under Section 244(1A) was received much later and could not affect the waiver claim for the earlier assessment year. It further found that the assessment and demand position remained unsettled for years because of repeated rectifications and that the undertaking had been under control for a long period, during which the assessee had no effective control over the relevant affairs. These circumstances showed undue hardship and circumstances beyond the assessee's control.

Conclusion: The assessee satisfied all the requirements of Section 220(2A), and the rejection of the waiver application was unjustified. The waiver of interest was therefore warranted.

Ratio Decidendi: Interest under Section 220(2A) must be waived where the assessee establishes the statutory cumulative conditions and the authority's refusal rests on irrelevant or legally untenable considerations.

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