Judgment :- 1. A proceeding under the Income Tax Act, 1961 (briefly the Act) has led to this application under Art.226 of the Constitution. 2. The facts are not seriously disputed. The petitioner is an assessee on the files of the Income tax Officer, A Ward, Palghat and for the assessment year 1976-77 he was assessed to income tax by Ext. P1 order dated 26 31977. The tax determined was Rs. 82650/-, to which there is advance payment under S.140-A to the tune of Rs. 77,048/- But while pronouncing the order of assessment the Income tax Officer also levied what is called penal interest under S.217 and S 139 (8) of the Act quantifying the interest at Rs. 7795/- and Rs 21,000/- respectively. The actual demand was therefore only for Rs. 34,397/-. Against the levy of penal interest under S.217 and 139 (8) of the Act the petitioner filed a petition before the first respondent, who is the Commissioner of Income tax, Kerala II, on the basis of S.273-A of the Act. That petition was dismissed by Ext. P3 order dated 25 719'77. It is the validity of Ext. P 3 order that is challenged in this petition. 3. To appreciate the contentions of the petitioner it is necessary to extract the relevant provisions of S.273A of the Act and which formed the basis of the application which led to Ext. P3 order. The relevant portions of S.273 A are sub-sections (i), (iii) and (c). 273A. Power to reduce or waive penalty, etc., in certain cases (1) Notwithstanding anything contained in this Act, the Commissioner may, in his discretion, whether on his own motion or otherwise. P3 order. The relevant portions of S.273 A are sub-sections (i), (iii) and (c). 273A. Power to reduce or waive penalty, etc., in certain cases (1) Notwithstanding anything contained in this Act, the Commissioner may, in his discretion, whether on his own motion or otherwise. (i) reduce or waive the amount of penalty imposed or imposable on a person under clause (i) of sub section (1) of S.271 for failure, without reasonable cause, to furnish the return of total income which he was required to furnish under sub section (1) of S.139; or (iii) reduce or waive the amount of interest paid or payable under sub section (8) of S.139 or S.215 or S.217 or the penalty imposed or imposable under S.273, if he is satisfied that such person (c) in the cases referred to in clause (iii), has, prior to the issue of a notice to him under sub section (2) of S.139, or where no such notice has been issued and the period for the issue of such notice has expired, prior to the issue of notice to him under S.148, voluntarily and in good faith made full and true disclosure of his income and has paid the tax on the income so disclosed, and also has. in all cases referred to in clauses (a), (b) and (c) co-operated in any enquiry relating to the assessment of bis income and has either paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year." The ground upon which the first respondent passed Ext. P3 order rejecting the petitioner's claim is that the cumulative conditions laid down in the relevant provisions of S.273A have not been complied with. As far as the present case is concerned, the non-compliance relates to the condition "or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year" occurring in S.273A (1). The petitioner has no case that a satisfactory arrangement for payment of the interest due under Ext P1 order was made if the relevant provision is to be interpreted in its literal sense. The petitioner has no case that a satisfactory arrangement for payment of the interest due under Ext P1 order was made if the relevant provision is to be interpreted in its literal sense. But his case is that there is compliance with this condition because he laid an application before the Income tax Officer, namely, the second respondent under S.220 (3) of the Act. I may read that provision. "220. When tax payable, and when assessee deemed in default (1) (3) Without prejudice to the provisions contained in sub-section [2], on an application made by the assessee before the expiry of the due date under sub section (1), the Income tax Officer may extend the time for payment or allow payment by instalments, subject to such conditions as he may think fit to impose in the circumstances of the case." It is the case of the petitioner that though in consequence of his application he received a notice from the Income-tax Officer and he offered his explanation, no order as such was passed by the second respondent and that since no order has been passed on the petition, it shall be deemed that arrangement has been made by him for the payment of interest due. In the first place from the use of the expression 'may' found in S 220 (3), it is possible to contend that the passing of an order by the Income-tax Officer is not mandatory when an application is laid under S.220 (3) of the Act. Secondly, it should be noted that even if he should pass an order, the order can only (a) extend the time for payment or (b) allow payment by instalments, subject to such conditions as he may think fit to impose in the circumstances of the case. So even if an order is passed under S.220 (3) by the Income-tax Officer in compliance with the directions contained therein, I fail to understand how that order can amount to the making of satisfactory arrangement for payment of tax or interest referred to in S.273A of the Act. It cannot, therefore, be said that the conditions laid down in S.273A have been complied with so as to justify the first respondent for interference with that portion of Ext. P1 which relates to the levy of penal interest under S.217 and 139(8) of the Act. It cannot, therefore, be said that the conditions laid down in S.273A have been complied with so as to justify the first respondent for interference with that portion of Ext. P1 which relates to the levy of penal interest under S.217 and 139(8) of the Act. In the result, this original petition is dismissed, but, in the circumstances of the case, without costs. Dismissed.