Kerala H.C : The interest levied under s. 139 of the Act can be waived or reduced by the ITO himself under r. 117A of the IT Rules, 1962, and the interest levied under s. 215 of the Act can also be waived or reduced under r. 40 of the IT Rules.

Counsel Appeared

K.V.R. Shenoi, P.I. Kurien & P. Balachandran, for the Petitioner : P.K. Ravindranatha Menon & N.R.K. Nair, for the Respondents

K.S. PARIPOORNAN, J.:

In these original petitions, the challenge is against the order passed by the CIT under s. 264 of the IT Act, 1961, for the years 1978-79 and 1979-80. It is exhibit P-4 in O. P. No. 1550 of 1981 dated February 4, 1981. Interest was levied for the above two years by the ITO under s. 139(8) of the IT Act and also under s. 215 of the Act. It is common ground that the interest levied under s. 139 of the Act can be waived or reduced by the ITO himself under r. 117A of the IT Rules, 1962, and the interest levied under s. 215 of the Act can also be waived or reduced under r. 40 of the IT Rules.

2. In a recent decision in Central Provinces Manganese Ore Co. Ltd. vs. CIT (1986) 58 CTR (SC) 112 : (1986) 160 ITR 961, the Supreme Court has held that the assessee should apply to the concerned ITO for reduction or waiver of interest in the first instance and it is only thereafter that a revision will lie before the CIT impugning the levy of interest under ss. 139(8) and 215 of the Act. Admittedly, in these two cases, no petition was filed before the concerned ITO for waiver or reduction of interest levied under ss. 139(8) and 215 of the Act. In such Circumstances, in the light of the decision of the Supreme Court in Central Provinces Manganese Ore Co. Ltd. vs. CIT (supra), it is not proper for this Court to examine the legality or validity of the order passed by the CIT dated February 4, 1981, for the above two years. All the same, we are of the view that the assessee should be given a chance to ventilate its grievances. So, we direct that if the petitioner-assessee files appropriate petitions before the concerned ITO within one month from today for waiver or reduction of interest, the said petition will be considered and disposed of on merits unhampered by any observations or findings contained in the order of the CIT dated February 4, 1981. The assessee will also be entitled to be heard before final orders are passed in the petitions filed by it for waiver and/or reduction of interest.

The original petitions are disposed of with the above observations. There shall be no order as to costs.

[Citation : 171 ITR 479]