TaxTMI 
TaxTMI 
2009 (5) TMI 4
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....the IT Act. As a consequence it had moved the Hon'ble Supreme Court of India through a writ petition in the course of the hearing of which the operation and effect of the amended provisions of Section 80-J of the IT Act had been stayed. The Petitioner had also moved applications dated 08.04.1983 and 25.05.1983 for the stay of the aforesaid Demand; and the same was stayed by the Inspecting Assistant Commissioner vide his letters dated 12.04.1983 and 01.06.1983 for a period of six months. These interim orders were further extended till 31.03.1985 vide orders dated 11.01.1985. However, on 25.01.1985 the Hon'ble Supreme Court was pleased to dismiss the Writ Petitions, upholding the validity of the retrospective amendment of Section 80-J of the IT Act. Mr. C.S. Aggarwal, learned Senior Counsel for the Petitioner, contends that the pending demands were thereupon paid on 4.3.1985. Subsequently, the Revenue issued a notice under Section 221(1) claiming amounts of Rupees 31,330/-, Rupees 1,06,761/- and Rupees 2,58,362/- ostensibly towards penalty although in the body of the notice Section 220 has been mentioned. Eventually, these demands were further raised to Rupees 46,889/, Rupees 1,19,41....
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....as no embargo or impediment, whatsoever, on the Petitioner to pay the assessed tax without prejudice to the outcome of its petition pending in the Supreme Court. Had that been done, it would have certainly removed and eradicated the liability for payment of interest. We find it legally preposterous to suggest that the liability to pay tax is not just postponed but is totally neutralized in the duration of interim orders. The argument that interest could not be charged till the dismissal of the writ petition (which coincided with the withdrawal of interim orders) is summarily rejected, it being devoid of merits. The following extract from Kanoria Chemicals & Industries Ltd. vs. UP State Electricity Board, (1997) 5 SCC 772 clarifies the legal position -"....It is equally well settled that an order of stay granted pending disposal of a writ petition/suit or other proceeding, comes to an end with the dismissal of the substantive proceeding and that it is the duty of the court in such a case to put the parties in the same position they would have been but for the interim orders of the court. Any other view would result in the act or order of the court prejudicing a party (Board in this ....
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....s to whether or not the Demand Notices adhered to Form No.7. Certainly, this precise objection has not been ventilated prior to the stage of final arguments. This submission is accordingly rejected. 6. We shall now consider the legal propriety of the impugned Order dated 2.8.1995 declining to waive the interest which reads thus:- Subject :- Waiver of Interest u/s 220(2A) of the Income-tax Act, 1961 - regarding I am directed to refer to your petition No. NIL dated 1-3-85 on the subject mentioned above and to say that your petition has been considered by the Board. It is regretted that your request cannot be acceded to. 7. It is not in controversy that the Petitioner was not granted any hearing by the concerned authority prior to the passing of the impugned order. It has accordingly been contended by learned Senior Counsel for the Petitioner that there has been a serious breach of the broader and ubiquitously applicable principles of natural justice which would result in the impugned Order being completely vitiated. This argument is posited on S.L. Kapoor vs. Jagmohan, AIR 1981 SC 136 which decision indubitably continues to hold the field. On the other hand, the contentio....
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....dicial decision. If it is satisfied that the reasons contained in the application would bring the case under Clauses (i) (ii) and (iii) of Section 220(2A) then it has the power either to reduce or waive the amount of interest. Even though in the said Sub-section it is not stated that any reasons are to be recorded in the order deciding such an application, it appears to us that it is implicit in the said provision that whenever such an application is filed the same should be decided by a speaking order. Principles of natural justice in this regard would be clearly applicable. It will be seen that a decision which is taken by the authority under Section 220(2A) can be subjected to judicial review, as was sought to be done in the present case by filing a petition under article 226, this being so and where the decision of the application may have repercussion with regard to the amount of interest which an assessee is required to pay it would be imperative that some reasons are given by the authority while disposing of the application. Mr. Salve, the learned senior counsel for the appellant has strongly relied upon the observations of this Court in The Siemens Engineering and Manufactu....