Madras H.C : The assessee’s request for waiver of interest under s. 220(2A) of the IT Act, 1961, for the years 1974-75 to 1984-85 as also for other years was rejected by the CIT who held that no undue hardship was caused to the assessee by the assessee having to pay the interest so levied.

Counsel Appeared

V.S. Ramakrishnan, for the Petitioner : Mrs. Kala Ramesh, for the Respondents

ORDER

R. JAYASIMHA BABU, J. :

The assessee’s request for waiver of interest under s. 220(2A) of the IT Act, 1961, for the years 1974-75 to 1984-85 as also for other years was rejected by the CIT who held that no undue hardship was caused to the assessee by the assessee having to pay the interest so levied. It is submitted by learned counsel for assessee that the amount of interest for all these years as also for other years was collected by the Revenue at the time the certificate under s. 230A was issued to the petitioner, which certificate he had sought prior to the sale of the property owned by him. That the property was sold as found by the CIT for a sum of Rs. 5.50 crores. The aggregate amount of the interest payable by the assessee for these years is about Rs. 5.3 lakhs. The CIT was of the view that no undue hardship would be caused to the assessee in the background of the fact that very substantial consideration had beenreceived by the assessee. Learned counsel for the assessee relying on the decision of the Madhya Pradesh High Court in the case of K.L. Jaiswal vs. WTO & Anr. (1994) 116 CTR (MP) 508 : (1996) 221 ITR 426 (MP) : TC 68R.214 submitted that the point of time with reference to which the assessee’s hardship has to be considered, is the time of assessment and not at any subsequent point of time. In the case relied upon by the counsel the assessee’s request for waiver had been rejected on the ground that the amounts had already been collected and no other reason was given for the rejection. The Court in that background held that the word “case” referred to in cl. (1) of sub-s. (4) of s. 18B of the WT Act, 1957, has reference to the entire case commencing from the filing of the return of wealth and does not refer to the proceedings which commence from the filing of the application under sub-s. (4) of the s. 18B or waiver or reduction of penalty. With great respect I am unable to agree with the view that circumstances prevailing at the time of consideration of application for waiver are not relevant. The CIT has to consider the circumstances that prevailed at the time his jurisdiction is invoked and all circumstances then prevailing can be taken note of by the CIT. There is no artificial line to be drawn at any particular point preceding the date of decision upto which point alone the circumstances of the case should be regarded as worthy of consideration. Though the mere fact of payment by itself may not be held against the applicant seeking waiver, if there are other circumstances, warranting waiver, when it is a matter of record that at the time the waiver was sought and at the time the order was passed thereon, that the assessee had received a very substantial sum of Rs. 5.50 crores as consideration for the sale of his property and the amount of interest which he was required to pay was in the sum of Rs. 5.30 lakhs which amount is about one per cent of the consideration received, it certainly cannot be said that any undue hardship was being caused to the assessee by reason of the waiver being denied to him. The object of the provision enabling the CIT to waive interest and penalty is not to add to the wealth of the assessee, but to relieve the assessee from genuine hardship. The ordinary rule is that the persons who do not obey the law in the manner required are liable to be penalised. They may be relieved of that liability if thecircumstances specially provided for by the statute are shown to exist and it is for the persons seeking waiver to demonstrate that the waiver is warranted having regard to the statutory conditions for waiver. If at the time the relief is sought, the assessee had no hardship, relief cannot be granted by holding that at some time in the past the assessee had hardship. Whatever hardship he may have had earlier had already been relieved by reason of the very substantial consideration he received from the sale of the property. There was at the time of the order of the CIT no hardship requiring relief. The order of the CIT, therefore, is not the one which requires interference. The writ petitions are dismissed. No costs.

[Citation : 248 ITR 626]