Law:

Section:

Section 139(8), read with section 217, of the Income-tax Act, 1961 and with rule 40 and rule 117A of the Income-tax Rules, 1962 - Return of income - Interest for late filing of - Assessment years 1986-87 and 1987-88 - Whether where Commissioner while rejecting assessee's waiver of interest petition, had not considered various circumstances projected by assessee in its waiver petition and explanations offered on question of its financial difficulties and hardship faced, matter was to be remitted back to him for de novo consideration - Held, yes FACTS The assessee-society, engaged in the business of marketing silk sarees produced by its members, committed default in payment of advance tax and in not filing returns within the permitted time. Consequently, the Assessing Officer apart from demanding tax, also levied interest under sections 139(8) and 217. Subsequently, the assessee availed the benefit of the Kar Vivad Samadhan Scheme and also filed an application before the Addl. Commissioner seeking waiver of said interest, inter alia, on the grounds that it was suffering from huge financial strain, that there were no fixed assets, that the tax liability itself could be met only from the working capital or loan borrowed from a co-operative bank; and that the utilization of cash credit for purposes other than granting of loan to the members would only bring the assessee to a grinding halt. The Addl. Commissioner, however, granted only partial relief. On appeal, the Commissioner holding that the assessee's case did not fall for consideration under the conditions listed in rules 40 and 117A, confirmed the impugned order. On writ : HELD It is a fairly settled proposition of law that granting waiver is a matter of discretion, yet the exercise of discretion under the rules is conditional upon the satisfaction of the authorities concerned as to the existence of the appropriate circumstances alone. Hence, the conclusion as to whether the circumstances exist or do not exist will ordinarily be a finding of fact. In exceptional circumstances, the High Court would exercise its writ jurisdiction to find out whether the view of the authorities below is sustainable and supported…

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