Malla Appa Rao vs Commissioner of Income Tax and Others

P. Venkatarama Reddi, J.—The petitioner has assailed the order dated January 25, 1989, passed by the Commissioner of Income Tax, Visakhapatnam, rejecting his request for waiver of interest u/s 220(2A) of the Income Tax Act, 1961, for the assessment years 1973-74 and 1979-80. As far as the claim for waiver based on Section 220(2A) is concerned, there is a clear finding to the effect that the petitioner could not establish any genuine hardship in not paying the tax and the said finding cannot be interfered with under article 226 of the Constitution of India. Hence, one of the pre-requisites for granting relief under the said section is not satisfied. At the same time, the petitioner also made a request for waiver of 50 per cent. of interest- under a scheme known as the Time Window Scheme formulated by the Central Board of Direct Taxes on July 5, 1988. As per the scheme, the assessee in whose case certification to the Tax Recovery Officer was sent by March 31, 1986, will be entitled to a rebate of 50 per cent. of the interest chargeable u/s 220(2) if he makes full payment of arrears together with 50 per cent. of the interest within stipulated time. The Commissioner noted that the said condition has not been satisfied as regards the arrears of tax due for the year 1973-74 are concerned.

With regard to the year 1979-80, the learned Commissioner observed that there was no interest payable u/s 220(2) by the time the scheme came into force and, therefore, the question of allowing relief under the scheme does not arise.

Concentrating on the question of remission of interest for the year 1973-74, learned counsel for the petitioner has contended with much force that there is no logic nor rationale for denying the relief to the assessee in whose case the certificate was not forwarded to the Tax Recovery Officer despite the fact that the arrears were old. It is, therefore, submitted that the petitioner shall not suffer any disadvantage on account of fortuitous circumstance of the Income Tax Officer not taking steps to send the certificate to the Tax Recovery Officer. It is also pointed out that the petitioner has already paid 50 per cent. of the interest. This contention of learned counsel raises the question as to the validity of the restriction imposed in the scheme or in the alternative the scope of relief which could still be granted under the scheme. As regards the former aspect, i.e., regarding the validity of the condition imposed, as there is no direct challenge to the circular, we are not inclined to go into that question at this distance of time. However, whether the terms of the scheme promulgated by the Central Board of Direct Taxes can be so extended as to afford relief in genuine cases such as that of the petitioner, have to be more appropriately considered by the Central Board of Direct Taxes which has framed this scheme, keeping in view the spirit and objective of the scheme.

We are, therefore, inclined to permit the petitioner to make a representation to the Central Board of Direct Taxes within a month''s time and the same shall be disposed of with expedition keeping in view all the relevant factors. We direct that the proceedings for recovery of the balance interest shall be kept in abeyance for a period of four months. The writ petition is disposed of accordingly. No costs.