Law:

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Section 217 of the Income-tax Act, 1961 - Advance tax - Interest payable by assessee for non-filing of estimate - Commissioner upheld petitioner's prayer for waiver of penalties under sections 271(1)( a) and 273(b) [as it stood prior to 1-6-1978] and interest under section 139(8), but refused to waive interest payable under section 217 since advance tax payable had been retained by petitioner - Whether commissioner right in refusing to waive said interest - Held, on facts, no Facts During the assessment years 1968-69, 1970-71 to 1973-74 and 1976-77, the petitioner prayed for the waiver of penalties under sections 271(1)(a) and 273(b) [as it stood prior to 1-6-1978] and interest under sections 139(8) and 217. The Commissioner held that since the conditions stipulated under section 273A(1) were satisfied, penalties under sections 271(1)(a) and 273(b) and interest under section 139(8) could be waived. However, the Commissioner observed that there was no need to interfere with the reasonable interest levied under section 217 as the advance tax payable had been retained by the petitioner and he had the user of the money during the period. On writ, the petitioner contended that the reason given by the Commissioner for refusing to waive the interest payable under section 217 was untenable and that part of the order had not been made in due exercise of the jurisdiction under section 273A. Held The question of waiver had to be considered notwithstanding the fact that the assessee was liable to pay the interest and had not paid it and the fact that there was a default in this behalf by the assessee. The mere fact that the assessee had failed to file the estimate and thereby had become liable to be charged with interest and that he had not paid the interest would not by itself be a ground for refusing to exercise the jurisdiction to waive the interest under section 217. Therefore, the Commissioner's reason for refusal to waive interest under section 217 was not tenable and he was directed to make a fresh order in the light of aforesaid observations. Editor's note The aforesaid direction, however, could not be for the entire order of the Commissioner since the Commissioner…

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