G.T.N. Textiles Ltd. vs Deputy Commissioner of Income Tax and Another

Varghese Kalliath, J.—This is an appeal against the judgment of a learned single judge of this court in Original Petition No. 1714 of 1992 (see G.T.N. Textiles Ltd. Vs. Deputy Commissioner of Income Tax and Another, ). The learned single judge dismissed the original, petition. Hence, the petitioner has come up in appeal.

The petitioner-appellant sought for a writ of certiorari to quash exhibit P-3 to the extent of the rejection of the application for waiver of interest levied u/s 220(2) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). The appellant also prayed for a writ of mandamus directing the second respondent-Commissioner of income tax--to reconsider the appellant''s application for waiver of interest levied u/s 220(2) of the Act. The learned single judge found that exhibit P-3 order is perfectly valid. Exhibit P-3 is an order passed by the Income Tax Commissioner in a revision petition filed by the petitioner u/s 264 of the Act.

The learned single judge found that exhibit P-3 is a valid order in so far as the Commissioner of Income Tax has exercised his discretion vested in him u/s 220(2) of the Act properly and correctly.

Section 220(2A) of the Act empowers the Commissioner to reduce or waive interest paid or payable u/s 220 of the Act, Section 220(2) of the Act reads thus :

"220. (2A) Notwithstanding anything contained in Sub-section (2), the Chief Commissioner or Commissioner may reduce or waive the amount of interest paid or payable by an assessee under the said sub-section if he is satisfied that -

(i) payment of such amount has caused or would cause genuine hardship to the assessee ;

(ii) default in the payment of the amount on which interest has been paid or was payable under the said sub-section was due to circumstances beyond the control of the assessee ; and

(iii) the assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him."

We think that the three conditions mentioned above are to be satisfied for the operation of Section 220(2) of the Act. The Commissioner has found that one of the necessary conditions for exercising the power u/s 220(2) that the payment of interest has caused or would cause genuine hardship to the assessee is not existent in the case of the petitioner. The Commissioner has found that the assessee is earning very good income from its business. So long as all the conditions have to be satisfied and the Commissioner has found that the first condition is not satisfied on the basis of certain facts, there is no scope for this court to interfere with such a discretionary order, exercising the power under Article 226 of the Constitution. The learned single judge has rightly found that the petitioner is not entitled to any relief under Article 226 of the Constitution and dismissed the original petition.

We see no merit in the appeal and it is only to be dismissed. We do so.