A.M. Zainalabdeen Musaliar, Zainal Cashew Packers vs Chief Commissioner of Income Tax

Petitioner is challenging Ext. P3 order whereunder the Chief Commissioner of Income Tax has granted only partial waiver of interest demanded u/s 220(2) of the Income Tax Act for belated payment of tax. It is seen that petitioner dragged the payment of tax for the assessment year 1978-79 for several years by contesting the assessment. The liability remained uncleared for nearly 20 years and when there was an outstanding demand of Rs. 5,70,000 and odd towards interest dues after adjusting payments made, the petitioner approached this court and this court vide Ext. P2 judgment dated 25-3-1999 granted stay against recovery on payment of further sum of Rs. 1.5 lakhs with direction to the respondents to reconsider the balance liability. Petitioner thereafter filed waiver Application u/s 220(2A) of the Act and on that application the Chief Commissioner issued Ext. P3 order. The interest demanded u/s 220(2) is only interest for delayed payment and there was no provision to waive the said interest until 1984 when section 220(2A) was introduced. Strictly speaking petitioner may not be entitled to waiver of interest based on later amendment as the arrears of tax is due from 1978-79 onwards. In any case it is seen that under the general powers conferred u/s 119(2A) of the Act the Chief Commissioner granted waiver of interest. Even though counsel for the petitioner vehemently contended that the relief granted is inadequate on going through the order of the Chief Commissioner. I find out of the total interest liability of Rs. 5,70,936 that too for admitted delayed payment of tax, the Chief Commissioner has accepted payment of Rs. 2,15,765 and waived the balance of Rs. 3,55,171. On the face of it I find Ext. P3 order is a very liberal order which calls for no interference by this court because the Chief Commissioner of Income Tax has waived around 60 per cent of the interest payable under the statute.

In the circumstances, O.P. is devoid of any merit and is dismissed.