2018 (12) TMI 1269 - HC - Income Tax

High Court affirms judgment on waiver application under Section 220(2)

M/s Sri Chakra Educational Foundation Versus The Commissioner of Income Tax (Exemptions)

The High Court upheld the Single Judge's decision directing the respondent to consider the appellant's waiver application under Section 220(2) and Rule 5 ... Waiver of interest u/s 220(2) and Rule 5 of the Second Schedule to the Act - quantification of refund eligible in view of the expiry of time limit of one year from the end of the month in which the petition for waiver was filed - Held that:- There is no error in the order passed by the learned Single Judge in directing the respondent to decide the application for waiver dated 21.2.2017. The decision in the case of Strawboard Manufacturing Co. Ltd.[1952 (12) TMI 32 - SUPREME COURT] can be of no assistance to the case of the assessee, since it was a case where a Notification was issued under the Industrial Disputes Act, 1947 notifying a Tribunal to decide the issue within a time frame. The question was as to whether the Tribunal had become functus officio after the period had lapsed. The facts of the present case are entirely different since the case on hand is a case where there is exercise of statutory powers under Section 220(2A) of the Act, which also contains conditions to be fulfilled by the assessee. Issues:Challenge to order passed by Single Judge in W.P.No.10149 of 2018 for waiver of interest under Section 220(2) and Rule 5 of the Second Schedule to the Act for assessment year 1996-97.Analysis:The appellant filed a writ petition seeking a Writ of Mandamus for waiver of interest under Section 220(2) and Rule 5 of the Second Schedule to the Act for the assessment year 1996-97. The learned Single Judge directed the respondent to consider the petition for waiver filed by the appellant dated 21.2.2017. The appellant argued that as per the Proviso to Section 220(2A) of the Income Tax Act, the order on waiver applications should be passed within twelve months from the date of application. Since no order was passed within the stipulated time after the application on 22.2.2017, the appellant claimed entitlement to the refund of any interest paid. The appellant cited the case law to support their position.The respondent contended that the appellant must fulfill three conditions under Section 220(2A) of the Act to be entitled to waiver, and the lapse of twelve months does not automatically grant waiver. After considering the arguments, the High Court found no error in the Single Judge's decision to direct the respondent to decide on the waiver application. The Court distinguished the case law cited by the appellant, stating that the present case involves statutory powers under Section 220(2A) with specific conditions for the assessee to meet.The High Court dismissed the writ appeal, emphasizing that the issues of jurisdiction raised by the appellant can be addressed before the respondent while deciding on the waiver application dated 21.2.2017. The Court directed the respondent to consider both the waiver application and jurisdictional issues raised by the appellant. The appellant's request to adjourn the hearing was granted, with the respondent instructed to postpone the hearing by a week and issue a fresh notice to the assessee.