A.M.MOOSA V. THE COMMISSIONER OF INCOME TAX

WA/744/2013

AI Insights

The case involves A.M. Moosa Bharat Sea Foods, the appellant, who contested the decision regarding the disallowance of deductions under Section 80HHC of the Income Tax Act for the assessment year 1992-93. The primary legal issue was whether the appellant could claim relief under Section 220(2A) of the Income Tax Act, which allows for the reduction or waiver of interest on tax due if genuine hardship is proven. The authorities and the learned Single Judge found that the appellant did not meet all the conditions required under Section 220(2A), particularly the condition of proving genuine hardship, leading to the dismissal of the appeal.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 755834 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 01-10-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: S RAJ
• Keywords: Assessment; Deductions; Financial hardship; Genuine hardship; Income Tax
• Section: 143(3); 220(2); 220(2A)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE TUESDAY, THE 1ST DAY OF OCTOBER 2013/9TH ASWINA, 1935 WA.No. 744 of 2013 IN WP(C).21824/2012 ------------------------------------------- AGAINST THE JUDGMENT IN WP(C) 21824/2012 DATED 27-09-2012 ............... APPELLANT/PETITIONER : ------------------------------ A.M.MOOSA BHARAT SEA FOODS, CHANDIROOR, ALAPPUZHA - 688 547. BY ADV. SRI.S.ARUN RAJ RESPONDENTS/RESPONDENTS : ------------------------------------ 1. THE COMMISSIONER OF INCOME TAX PUBLIC LIBRARY BUILDING, KOTTAYAM - 686 001. 2. DY. COMMISSIONER OF INCOME TAX CIRECLE-I, ALAPPUZHA - 688 001. 3. THE TAX RECOVERY OFFICER, PUBLIC LIBRARY BUILDINGS, KOTTAYAM - 686 001. BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 01-10-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: “C.R.” Manjula Chellur, C.J. & A.M. Shaffique, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - - W.A. No. 744 OF 2013 - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 1st day of October, 2013 JUDGMENT Manjula Chellur, C.J. Heard learned counsel for the appellant. We have gone through the order of the assessing officer (Ext.P7) on the application filed by the appellant assessee under Section 220 (2) of Income Tax Act at Ext.P6, as well as the judgment of the learned Single Judge. 2. It is not in dispute that so far as the return of income filed by the assessee for the year 1992-93 which was taken up for scrutiny came to be completed only on 19.01.1995 under Section 143(3) of the Act. The total income including the agricultural income was more than the income shown in the returns, therefore, the claim of deductions under Section 80HHC of the Act amounting to `11,29,813/- was disallowed. As against this, the appellant assessee approached all the forums available under the Act. Ultimately, the question that came up for consideration was, whether the assessee was WA No. 744 of 2013 -:2:- able to satisfy all the three conditions to claim the benefit as indicated under Section 220(2A) of the Act is the controversy before us. Admittedly the appellant is relying upon the first condition and not the two other conditions. Section 220(2A)(i) of the Income Tax Act reads as under: “220. When tax payable and when assessee deemed in default.- xx xx xx xx (2A) Notwithstanding anything contained in sub- section (2), the Chief Commissioner or Commissioner may reduce or waive the amount of interest paid or payable by an assessee under the said sub-section if he is satisfied that- (i) payment of such amount has caused or would cause genuine hardship to the assessee;” 3. The learned Judge after referring to the report of the assessing officer, ultimately opined that all the three conditions enumerated under Section 220(2A) have to be complied with in order to get the benefit. The claim of genuine hardship was not established in the light of returns filed by the appellant assessee for the assessment year 2006-07 and WA No. 744 of 2013 -:3:- therefore he was not entitled for any benefit. This view of the appellate authority and the Commissioner of Income Tax at Ext.P7 came to be affirmed by the learned Single Judge. Aggrieved by the same, the present appeal is filed. 4. According to learned counsel for the appellant, the cause of genuine hardship under sub-clause(i) of Section 220 (2A) does not mean only financial hardship and other relevant factors have to be taken into consideration. We fail to understand what are the other contentions other than the genuine financial hardship, so far as the present case is concerned. It is not the case of the Department that application under Section 220(2A) of the Act was not filed according to the procedure. It is not even the case of any of the parties that there are other legal lacuna or impediment so far as considering such application which is filed by the appellant. It is not even the case of the appellant assessee that he was not able to plead such claim within the time prescribed. In the absence of those circumstances the only genuine cause could be the financial hardship, therefore, the Commissioner for Income Tax after WA No. 744 of 2013 -:4:- referring to the details in the returns filed by the assessee proceeded to hold that in the absence of genuine hardship being satisfied by the appellant, he is not entitled for any of the benefit under Section 220(2A) of the Act. It is clear from the returns of income for the assessment year 2006-07, as per the balance sheet furnished by the assessee as on 31.03.2006, the assessee had cash balance of `23,04,809/-, debtors of `30,07,500/- as against creditors `3,16,469/- and the asset worth `52,97,037/-. Apart from this, export incentives receivable is `14,30,904/-. In the light of the above details of his returns for the assessment year 2006-07, whether one can consider the genuine hardship claimed by the assessee as a reasonable one is the only question. 5. After referring to the details of the returns of income filed by the appellant, the authorities who had the benefit of verifying records have already concluded factually what exactly was the state of affairs so far as the clear cash balance available and also other income to be received by the appellant/assessee. Therefore, they were justified in saying that there was no WA No. 744 of 2013 -:5:- genuine hardship as claimed, therefore one of the requirements of Section 220(2A) was not satisfied, hence it was properly held that he was not entitled for any benefit under Section 220(2A) of the Income Tax Act. Accordingly, affirming the opinion of the authorities and the learned Single Judge, we dismiss the appeal. Manjula Chellur, Chief Justice. A.M. Shaffique, Judge. ttb/01/10 "