Tarun Agarwala, J. - (1.) WE have heard Sri Nikhil Agrawal, the learned counsel for the petitioner and Sri Manu Ghildiyal, the learned counsel for the Income Tax Department.
(2.) THE present dispute relates to the order passed by the Commissioner of Income Tax, Varanasi under Section 220(2A) of the Income Tax Act (hereinafter to referred as the "Act") reducing the interest payable under Section 220(2) of the Act to 25%. The petitioner, being aggrieved, has filed the present writ petition praying that in the present facts and circumstances of the case, which has come on record, the petitioner was entitled for complete waiver of the interest. The background leading to the filing of the writ petition need not be repeated again as complete facts has already been given in the judgment of this Court dated 25.11.2011 passed in Writ Petition No. 1444 of 2009.
(3.) HOWEVER , in a nut shell it needs to be stated that a huge tax demand was created by the Income Tax Officer for the Assessment Year 1994 -95, which the petitioner contested upto the Tribunal. Interest was also charged in the assessment order. After culmination of the appeal, the tax demand was reduced to Rs. 75,000/ - which was paid by the petitioner on 27.9.2000. Interest was not paid. The assessing officer, after giving full effect to the appellate order reduced the demand to Rs. 75,000/ - on which interest was calculated at around Rs. 4.77 lacs. The petitioner, being aggrieved by the imposition of this interest filed an application under Section 220(2A) of the Act for waiver/reduction of the interest. This application was processed by the Commissioner of Income Tax who in its earlier order dated 26.2.2009 found that the ingredients, which are necessary under Section 220(2A) of the Act was existing. The Commissioner of Income Tax held: "4.3.1 For A.Y.2008 -09, the assessee has filed return of income on 31.7.2008, declaring total income of Rs. 1,08,300/ -, which inter alia, include income from salary of Rs. 1,40,400/ - for working with M/s. Varuna Bearing (P) Ltd. Therefore, it is to some extent apparent that payment of a sum of Rs. 4,77,412/ - may cause some amount of hardship to the assessee when the assessee has essentially Salary Income. 4.3.2 Default in payment of such amount on which interest is payable was due to circumstances beyond the control of the assessee. The assessee's submission in this regard appears to be some, since this was a case of prolonged adjudication.";