The assessee informed the official assignee that capital gains may accrue from the sale of the assets, and that capital gains tax should be paid in respect thereof. However, the official assignee did not take any steps in such regard. In those circumstances, the assessee filed an application to direct the official assignee to remit the capital gains tax so as to avert interest and penalty liabilities in respect thereof. The application was disposed of by the court directing the official assignee to set apart 20 per cent. of the insolvent’s share of the sale proceeds from the sale of the relevant immovable asset towards capital gains tax. On the basis of the order, 20 per cent. was initially parked in a Reserve Bank of India account and subsequently transferred to an interest bearing account pursuant to an order dated March 1, 2013. By notices issued between March 16, 2015 and February 22, 2016, the Income-tax Department informed the official assignee that the Income-tax liability of the estate of the insolvent had not been discharged. Eventually, ex parte assessment orders in respect of AY.s 2008-09 to 2018-19 were issued. Upon obtaining the permission of the court, the official assignee remitted tax on March 29, 2016, as regards AY.s 2008-09 to 2013-14; on December 15, 2016, as regards the AY. 2014-15 ; on December 21, 2016, as regards AY.s 2015-16 and 2016-17 ; and on March 15, 2018, as regards AY.s 2017-18 and 2018-19. The Income-tax Department issued a demand notice on January 5, 2017 claiming interest under sections 234A, 234B and 234C of the Income-tax Act, 1961, for delayed filing of returns, remittance of tax returns and advance tax. An aggregate sum of Rs.2,42,27,764 was claimed towards interest. On an application under rule 1 of Order II of the Insolvency Rules read with section 7 of the Presidency Towns Insolvency Act, 1909 praying for waiver of the interest in full and order for immediate release of the entire amount of Rs. 2,42,27,764 Court held  on account of the following reasons : the ex-insolvent/assessee was not in a position to remit Income-tax ; she took all possible measures to procure payment of tax ; and the debatable nature of and legitimate doubts regarding the tax liability of the estate of an insolvent, the assessee was entitled to a waiver of interest and penalty as regards non-payment of advance tax. The Income-tax Department was directed to recompute the interest liability on the amounts remitted in respect of the respective AY.s at the rate of 6 per cent. per annum instead of 1 per cent. per month from the dates specified or indicated above, as the case may be, without levying compound interest, penalty, or interest or penalty for non-payment of advance tax or for delayed filing of returns, and make a revised demand on such basis on the official assignee. Upon receipt thereof, the official assignee was directed to pay the sum within a period of 30 days from the date of receipt of such revised demand notice. The official assignee was further directed to pay the surplus, if any, after discharging the aforesaid liability to the assessee/ex-insolvent. (AY. 2008-09 to 2018-19)