High Court Of Allahabad
Ratan Lal Agrawal (HUF) vs. CIT & ANR.
Sections 220(2), 220(2A)
Asst. Years 1972-73, 1973-74, 1974-75, 1975-76, 1976-77, 1977-78, 1978-79, 1979-80, 198081, 1981-82, 1982-83, 1983-84, 1984-85, 1985-86, 1986-87, 1987-88
R.K. Agrawal & Vikram Nath, JJ.
Civil Misc. Writ Petn. No. 264 of 2001
4th October, 2006
Counsel Appeared
Shakeel Ahmad, for the Petitioner : A.N. Mahajan, for the Respondents
JUDGMENT
R.K. Agrawal, J. :
By means of the present writ petition filed under Art. 226 of the Constitution of India, the petitioner, Ratan Lal Agrawal, seeks the following reliefs : “(A) issue a writ, order or direction in the nature of certiorari quashing the impugned order dt. 31st Aug., 2000 (Annex. 15), passed by the CIT, Agra, respondent No. 1; (B) issue a writ, order or direction of a suitable nature commanding/directing respondent No. 1 to grant full waiver of interest under s. 220(2A) of the IT Act, 1961, amount to Rs. 4,33,071; (C) issue such other writ, orders or directions as this Hon’ble Court may deem fit and proper under the facts and circumstances of the case; (D) award costs to the petitioner.”
Briefly stated, the facts giving rise to the present petition are as follows. A huge income-tax demand was created for the asst. yrs. 1972-73 to 1987-88. Interest was also charged. After giving full effect to the appellate and revisional orders, the demand was reduced as a consequence of which the interest amount of Rs. 16,94,592 was reduced to Rs. 10,57,877 which became payable by the petitioner. The petitioner moved an application under s. 220(2A) of the IT Act, 1961 (hereinafter referred to as “the Act”), for waiver before the CIT, Agra. The CIT, Agra, vide order dt. 14th March, 1997, had found that all the three conditions mentioned in cls. (i) to (iii) of sub-s. (2A) of s. 220 of the Act have been fulfilled by the petitioner. However, he waived the entire amount of interest except a sum of Rs. 4,33,071. The order dt. 14th March, 1997, was challenged by the petitioner by means of Civil Misc. Writ Petn. No. 453 of 1997 before this Court, which was disposed of vide judgment and order dt. 19th April, 1999. This Court has upheld the discretion of the CIT to either reduce the amount or to waive it. However, it remanded the matter to the CIT to pass a fresh order relating to Rs. 4,33,071 after hearing and giving an opportunity to the petitioner and carefully considering the submissions of the petitioner in the matter. Pursuant to the directions given by this Court, the CIT heard the matter and by order dt. 31st Aug., 2000, has waived the entire amount of interest except a sum of Rs. 4,33,071 which, according to him, represents the amount of interest paid by the Department under s. 244(1A) of the Act in respect of delayed refund for the asst. yrs. 1972-73 and 1974-75 to 1982-83. The order dt. 31st Aug., 2000, is under challenge in the present writ petition.
We have heard Sri Shakeel Ahmad, learned counsel for the petitioner, and Sri A.N. Mahajan, learned counsel appearing for the respondents. Sri Shakeel Ahmad, learned counsel for the petitioner, submitted that it is not in dispute that the CIT, Agra, in his order dt. 14th March, 1997, had found that the petitioner fulfilled all the three conditions laid down in s. 220(2A) of the Act and, therefore, the CIT ought to have exercised the discretion in a judicial manner. According to him, the reason given for reducing the amount of interest payable by the petitioner to Rs. 4,33,071 is no reason in the eye of law and, therefore, the impugned order is liable to be set aside. Sri A.N. Mahajan, learned counsel for the Revenue, submitted that even upon all the conditions as laid down in sub-s. (2A) of s. 220 of the Act having been fulfilled, it is open to the CIT to either waive the entire amount of interest or reduce the amount. It is not incumbent upon him to waive the entire amount once all the three conditions are fulfilled. He further submitted that this Court in its judgment and order dt. 19th April, 1999 had negatived this very plea advanced by the petitioner and, therefore, the power of the CIT to reduce the amount of interest upon fulfilling the conditions stands acknowledged. He further submitted that as the petitioner had received a sum of Rs. 4,33,071 from the Department, the CIT, Agra, was fully justified in reducing the amount of interest payable by the petitioner except the aforesaid amount.We have given our anxious consideration to the various pleas raised by learned counsel for the parties. It is well settled that under sub-s. (2A) of s. 220 of the Act, upon the conditions being fulfilled, the CIT has the power either to reduce or waive the amount of interest. It is not correct to say that the moment the three conditions enumerated are fulfilled, the only power left with the CIT is to waive the amount of interest. Even this Court in its judgment and order dt. 19th April, 1999, in the writ petition filed by the petitioner had negatived the similar plea advanced by the petitioner’s counsel, which order has become final and binding between the parties. Thus, the CIT can either reduce or waive the interest depending upon the circumstances.
So far as the merits are concerned, we find that it is not in dispute that the petitioner has received a sum of Rs. 4,33,071 as interest on delayed refund. The liability of the petitioner towards interest on delay in deposit of taxes due is very much there. If the CIT has taken this into consideration regarding the sum of Rs. 4,33,071, it cannot be said that the CIT has acted on irrelevant or extraneous consideration. The order dt. 31st Aug., 2000, passed by the CIT, therefore, does not suffer from any legal infirmity.
The writ petition lacks merit and is dismissed.
[Citation : 290 ITR 478]
