Statutory interest waiver is unavailable in an individual case where the enabling power is limited to a class of cases.

Interest levied under Section 158BFA of the Income-tax Act could not be waived in an individual case under Section 119(2)(a) because that power extends only to a class of cases, and the assessee's belated block return attracted the statutory levy. Interest under Section 245D(6A) was also not independently waivable, as it arises from delayed payment under the settlement scheme in Chapter XIX-A and forms part of that statutory framework. The writ appeal failed, the impugned demand was maintained, and the Department was directed to issue a revised demand notice after crediting payments already made.

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Issues: (i) Whether interest levied under Section 158BFA of the Income-tax Act, 1961 could be waived in an individual case under Section 119(2)(a) of the Act. (ii) Whether interest leviable under Section 245D(6A) of the Income-tax Act, 1961 could be waived as claimed by the appellant.

Issue (i): Whether interest levied under Section 158BFA of the Income-tax Act, 1961 could be waived in an individual case under Section 119(2)(a) of the Act.

Analysis: The return in response to the block assessment notice was filed belatedly, and the levy under Section 158BFA was therefore attracted on the final determination of tax. The power under Section 119(2)(a) is confined to waiver in relation to a class of cases and not to an individual case. An erroneous reason in the CBDT order did not alter the position because the appellant did not fall within any notified class warranting waiver.

Conclusion: The claim for waiver of interest under Section 158BFA was not sustainable, and the issue was decided against the appellant.

Issue (ii): Whether interest leviable under Section 245D(6A) of the Income-tax Act, 1961 could be waived as claimed by the appellant.

Analysis: Interest under Section 245D(6A) arises from delayed payment of tax determined by the Settlement Commission and forms part of the statutory settlement scheme under Chapter XIX-A. Once the appellant chose settlement proceedings, the consequential interest could not be treated as independently waivable by the authorities.

Conclusion: The demand of interest under Section 245D(6A) was upheld and the issue was decided against the appellant.

Final Conclusion: The writ appeal failed, the judgment under appeal was left undisturbed, and the impugned demand was maintained, with a direction for the Department to issue a revised demand notice after giving credit for payments already made.

Ratio Decidendi: Interest statutory in nature and attracted on delayed filing or delayed payment cannot be waived in an individual case where the enabling provision permits waiver only for a class of cases, and interest that forms an integral part of a settlement under Chapter XIX-A is not independently waivable.

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