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of <h1>Court quashes order denying interest waiver, emphasizes objective review of financial constraints</h1> <h3>P. Mahendra Kumar Versus The Principal Commissioner of Income Tax, The Income Tax Officer, Ward 1 (1), The Tax Recovery Officer</h3> P. Mahendra Kumar Versus The Principal Commissioner of Income Tax, The Income Tax Officer, Ward 1 (1), The Tax Recovery Officer - TMI Issues:Challenge to order under Section 220(2A) of the Income Tax Act for interest waiver.Analysis:The petitioner challenged an order under Section 220(2A) of the Income Tax Act seeking waiver of interest. The petitioner contended that after finalizing the assessment order, they paid the tax amount but sought waiver of interest due to financial difficulties. The first respondent rejected the application citing lack of cooperation during scrutiny proceedings leading to an ex parte order under section 144 of the Income Tax Act. The petitioner denied these observations, stating they paid the tax amount by mortgaging property in installments due to financial constraints.The first respondent, however, argued that the petitioner's financial crunch claim was unsubstantiated as their receivables exceeded payables based on cash flow statements. The petitioner maintained their financial struggles and inability to pay interest due to impending property sale by the department. The second respondent requested business details and financial statements for consideration, which were submitted, but the first respondent's order lacked a clear rationale for denying the interest waiver.The court noted the lack of detailed discussion in the impugned order regarding the petitioner's financial situation and the possibility of unrecoverable debts. Emphasizing the need for objective consideration, the court directed the petitioner to pay a specified amount by a deadline for reconsideration of the interest waiver application. The court granted the petitioner an opportunity to present supporting documents to establish their financial constraints and inability to pay the interest demanded by the respondents. The court ordered the quashing of the impugned order and remanded the matter for fresh consideration, providing a timeframe for final orders by the first respondent. The judgment disposed of the writ petition with specified payment terms and no costs incurred.
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