Law:

Section:

Section 220 of the Income-tax Act, 1961 - Collection and recovery of tax - When tax payable and when assessee deemed in default - Assessment year 1988-89 - Commissioner taking view that default in payment of tax amount which led to levy of interest was not due to circumstances beyond control of assessee and that payment of interest would not cause any genuine hardship as there was excess payment made by assessee and remaining with department to be adjusted, rejected assessee's application under section 220(2A) for waiver of its interest liability - Assessee filed writ petition contending that Commissioner had not properly applied law governing section 220(2A) to fact situation as irrelevant factors had been taken into consideration while leaving out relevant factors, viz., assessee was continuously running under loss and it was in serious financial crisis at relevant time, being burdened with liabilities to PF, ESI, etc. - Whether since relevant factors had missed notice of Commissioner, order passed by Commissioner was to be remitted to him for fresh consideration - Held, yes FACTS After adjustments, the net liability of the assessee towards interest was determined at Rs. 12,27,772. The assessee filed application under section 220(2A) for waiver of interest. The Commissioner taking the view that the default in payment of the tax amount which led to the levy of interest was not due to circumstances beyond the control of the assessee and that the payment of interest would not cause any genuine hardship as there was excess payment made by assessee and remaining with the department to be adjusted, rejected the assessee's application. The assessee filed writ petition contending that the Commissioner had not properly applied the law governing section 220(2A) to the fact situations as irrelevant factors had been taken into consideration while leaving out as the relevant, viz., the assessee was continuously running under loss and it was in serious financial crisis at the relevant time, being burdened with liabilities to PF, ESI, etc. On petition : HELD A perusal of the statement of accounts of the assessee would show that it had been continuously running on loss up to…

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