1982 (2) TMI 12

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....ssessee in this case was under an obligation to file advance tax estimate under s. 212 of the I.T. Act, 1961, for the assessment year 1971-72. The assessee, however, failed to file an estimate of the advance tax. For failure to make an estimate, the ITO had to levy penal interest at a particular rate for a particular period of time, as set out in s. 217(1A) of the Act. Levy of this penal interest ....

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....evy of penal interest in the assessment order must be construed as a waiver on the part of the ITO to levy penal interest. Reference was made, in this connection, to the power of the ITO to waive interest under the express provisions of r. 40 of the I.T. Rules, 1962. This contention was not accepted by the Tribunal, and the order of the Commissioner was confirmed. In this reference, at the inst....

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....r an authority for this position, we may refer to a judgment of a Division Bench of this court in CIT v. City Palayacot Co. [1980] 122 ITR 430. It was pointed out in that judgment that waiver was not matter of course, but it was subject to a finding by the ITO that special circumstances existed in the case which justified either the waiver or, in the alternative, the reduction of the interest char....