COMMISSIONER OF INCOME TAX Vs. ASHOK TRADING COMPANY

JUDGEMENT

(1.) IN this reference under Section 256(1) of the INcome-tax Act, 1961 (hereinafter referred to as "the Act"), the question referred to us for our opinion reads as follows:

(2.) IN this reference, we are concerned with the assessment year 1969-70.

(3.) FROM the above, it will be seen that the Income-tax Officer may waive interest payable by an assessee. The proviso thereto, however, is rather significant. It lays down that where the sum likely to be imposed as penal interest may exceed Rs, 1,000, the Income-tax Officer can waive the payment of interest only with the previous approval of the Inspecting Assistant Commissioner, to follows therefrom that without the prior approval of the Inspecting Assistant Commissioner, an Income-tax Officer cannot waive levy of interest if it is likely to exceed Rs. 1,000. In this case, the interest charged was Rs. 3,000 odd and, therefore, this proviso came into operation. Without the previous approval of the Inspecting Assistant Commissioner, the Income-tax Officer did not have jurisdiction to waive the interest. Previous approval was thus a pre-condition for waiver. It is well established that waiver is a deliberate act. Omission or slip is not waiver. In this case, there was a bar to the exercise of the right of waiver. It is not in controversy that the Income-tax Officer neither secured prior approval of the Inspecting Assistant Commissioner to waive the penal interest nor was such a prayer maple by the assessee. If the Income-tax Officer had no jurisdiction to waive interest without the previous approval of the Inspecting Assistant Commissioner, it is obvious that the order of the Income-tax Officer keeping silent on the question of charging penal interest cannot amount to waiver. In that view of the matter, the Income-tax Officer was bound to levy interest. Being bound and having not exercised the jurisdiction, there was clearly an error apparent on the face of the record. That being the situation, Section 1 54 of the Act would clearly come into play. Section 154 of the Act lays down that an Income-tax Officer may amend an order of assessment with a view to rectify a mistake apparent from the record. Even if we were to assume that non-consideration of the question of levy of penal interest is taken or must be taken as waiving the interest, even that could be without jurisdiction because there was no prior approval by the Inspecting Assistant Commissioner. The position in law cannot be placed higher than that. The maximum that the assessee could assert was that the silence of the Income-tax officer must be deemed to be speech but in view of the proviso to the provisions of Rule 117A of the Income-tax Rules, the Income-tax Officer had no jurisdiction to waive it and the error being apparent it could be certainly rectified.