A.R.SIVADASAN & CO. V. CHIEF COMMISSIONER,DEPT. OF DIRECT TAXES

WP(C)/37706/2004

AI Insights

The case involves multiple writ petitions filed by M/S A.R. Sivadasan & Co., a partnership firm, challenging the rejection of their applications for waiver of interest on additional tax demands imposed following a change in legal interpretation by the courts. Initially, the firm was recognized as a registered entity for tax purposes, but this status was reversed by a Division Bench of the High Court, leading to additional tax liabilities. The firm sought relief under a government notification that allowed for the waiver of interest in certain circumstances, which was denied. The court's decision focused on whether the firm's situation fell under the specific provisions of the notification, particularly Clause (d), which was not established by the petitioners.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 738236 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 16-10-2012
• Assessment Year: misc
• Other Referred Cases: K.S. Ramakrishnan, P.K. Narayanan & Company v. Commissioner of Income Tax (223 ITR 209)
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: P K R MENON; GEORGE K GEORGE
• Assessee Lawyers: S ANANTHAKRISHNAN; N K SUBRAMANIAN
• Keywords: Registered Firm Status; Tax demand; Waiver of interest; Retrospective amendment of law
• Section: 234B; 234C; 119(2)(a)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC TUESDAY, THE 16TH DAY OF OCTOBER 2012/24TH ASWINA 1934 WP(C).No. 37706 of 2004 (L) ----------------------------------------- PETITIONER(S): ------------------------ M/S.A.R.SIVADASAN & CO., EDATHIRUTHY PO THRISSUR REP. BY ITS PARTNER K.K.GOPINATHAN. BY ADVS.SRI.S.ANANTHAKRISHNAN SRI.N.K.SUBRAMANIAN RESPONDENT(S): ---------------------- ---- 1. THE CHIEF COMMISSIONER, DEPARTMENT OF DIRECTOR TAXES, I.S.PRESS ROAD ERNAKULAM. 2. THE TAX RECOVERY OFFICER, RANGE I, MUNICIPAL BUILDINGS, WEST FORT, THRISSUR -4. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL,GOI(TAXES) BY ADV. SRI.GEORGE K. GEORGE, SC FOR IT THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 16-10-2012, ALONG WITH WPC. 18152/2005, WPC. 35364/2005, & WPC. 35413/2005, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: tss W.P.(C) NO.37706/2004 APPENDIX PETITIONER'S EXHIBITS:- P1:- COPY OF THE ORDER DT. 18.12.1992 DIRECTING REGISTRATION BY THE APPELLATE AUTHORITY. P2:- COPY OF THE ORDER DTD. 10.7.1997. P3:- COPY OF THE ORDER DTD. 20.11.2000 OF THE I.T.O. P4:- COPY OF THE PETITION FOR WAIVER DTD. 3.12.2001. P5:- COPY OF THE JUDGMENT DTD. 6.2.2004 WPC. 4172/2004. P6:- COPY OF THE ORDER DTD. 22.6.2004 OF THE IST RESPONDENT. RESPONDENT'S EXHIBITS:- NIL //TRUE COPY// P.A. TO JUDGE tss ANTONY DOMINIC,J ---------------------------------- W.P.(C)No. 37706 of 2004, 18152, 35413 & 35364 of 2005 ------------------------------------- Dated this the 16th day of October, 2012 JUDGMENT Issues raised in these writ petitions are common. Therefore, these cases were heard together. 2. In W.P.(c) No.37706/2004, the petitioner is a partnership firm. For the assessment year 1990-1991, they filed return and claimed status of a registered firm. That was declined by the Assessing Officer. However, in an appeal filed, the claim of the petitioner was allowed. The Tribunal was also confirmed the appellate order. However, in Tax Revision Case filed by the Revenue, a Division Bench of this Court reversed the appellate orders, following the Full Bench judgment of this Court in K.S. Ramakrishnan, P.K. Narayanan & Company v. Commissioner of Income Tax (223 ITR 209). 3. This resulted in an additional demand of tax and interest by Ext.P3. Petitioner thereupon paid the tax due W.P.(C).No. 37706 or 2004 and connected cases : 2 : and thereupon, submitted Ext.P4 application claiming waiver of interest pursuant to the notification dated 23.05.1996 issued by the Government of India under Section 119(2)(a) of the Income Tax Act. That application was rejected by Ext.P6 order. It is challenging Ext.P6, the writ petition is filed. 4. Insofar as writ petition No.18152/2005 is concerned, that pertains to the assessment year 1989- 1990. Facts are similar and Ext.P4 is the application for waiver, which was rejected by Ext.P7 order and the reasons assigned are also similar. 5. Insofar as W.P.(c) No.35413/2005 is concerned, facts are similar except that the assessment years involved are 1996-1997 and 1997-1998. Exts.P3 and P4 are the applications for waiver, which were also similarly rejected by Ext.P6 order. 6. Insofar as W.P.(C) No.35364/2005 is concerned, the relevant assessment year is 1998-1999. Except that W.P.(C).No. 37706 or 2004 and connected cases : 3 : Ext.P2 is the petition for waiver, which was rejected by Ext.P4 order, facts are similar in all these cases. When the writ petition was taken up, counsel for the petitioner contended that what is claimed by the petitioners in these cases, is the benefit of clause (d) of the notification dated 23.05.1996 as clarified by order dated 30.01.1997, which reads as under: “(d) Where any income which was not chargeable to income-tax on the basis of any order passed in the case of an assessee by the High Court within whose jurisdiction he is assessable to income-tax, and as a result, he did not pay income-tax in relation to such income in any previous year and subsequently, in consequence of any retrospective amendment of law or, as the case may be, the decision of the Supreme Court in his own case, which event has taken place after the end of any such previous year, in any assessment or reassessment proceedings the advance tax paid by the assessee during the financial year immediately preceding the relevant assessment year is found to be less than the amount of advance tax payable on his current income, the W.P.(C).No. 37706 or 2004 and connected cases : 4 : assessee is chargeable to interest under Section 234B or section 234C and the Chief Commissioner or Director-General is satisfied that this is a fit case for reduction or waiver of such interest.” 7. I heard the learned counsel for the petitioners and also the learned standing counsel appearing for the Revenue. 8. Clause (d) which is relied on, is applicable in a case where tax has been paid relying on the judgment of the High Court or Supreme Court and that subsequently, the liability got increased on account of reversal of the judgment relied on by the assessee. Therefore, the question whether the case for the petitioners is covered by Clause (d) of the notification will have to be ascertained with reference to the applications filed by them seeking waiver. 9. As already noticed, in W.P.(c) Nos.37706/2004 and 18152/2005, Ext.P4 are the applications. Insofar as W.P.(c) No.35413/2005 and 35364 of 2005, Exts.P3, P4 W.P.(C).No. 37706 or 2004 and connected cases : 5 : and P2 are the applications. Having closely perused these applications, I do not find any ground raised by the petitioners, which can be traced to Clause(d) of the notification dated 23.05.1996. Fact that none of the grounds traceable Clause (d) referred to above, has been raised by the petitioners is also evident from the orders passed by the respondents rejecting the applications. Further, in these orders also, no reference is made to any contention relying on the notification is neither noticed nor dealt with. Therefore, before the respondents, the petitioners did not establish a case covered by Clause (d) of the notification to contend that a claim under Clause(d) has been wrongly rejected by them. If that be so, I cannot find fault with impugned orders nor can this Court interfere with the same. Writ Petitions are dismissed. Sd/- ANTONY DOMINIC, JUDGE ln "