Dinesh Sharma V. Chief Commissioner of Income Tax

CWP/259/2010

AI Insights

The case involves Dinesh Sharma, the petitioner, who sought to quash the order of the Chief Commissioner of Income Tax, which rejected his application for a waiver of interest under Section 158 BFA1(a) of the Income Tax Act, 1961. This interest was related to the block assessment following a search at Sharma's premises in 1997. After the Settlement Commission's decision, which upheld the interest liability, Sharma approached the Chief Commissioner for a waiver, citing a CBDT circular. However, the Chief Commissioner denied the waiver, referencing Section 245-I of the Act, which restricts amendments to the Commission's orders. The High Court agreed with the Chief Commissioner, emphasizing that the Commission's decision on interest was final and could not be overridden by other authorities.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 810652 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 12-01-2010
• Assessment Year: misc
• Other Referred Cases: Smt. Kherunissa Allibhai v. Commissioner of Income-Tax [1978] 113 ITR 443, B.R. Sound-N-Music v. O.P. Bhardwaj and another [1988] 173 ITR 433, Commissioner of Income-Tax v. Anjum M.H.Ghaswala and others [2001] 252 ITR 1
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: RADHIKA SURI
• Keywords: Block assessment; CBDT Circular; Settlement commission; Undisclosed income; Waiver of interest
• Section: 158BC; 245-I; 245 D(4); 158 BFA1(a)

Judgement Text

"IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. C.W.P. No.259 of 2010 Date of decision: 12.1.2010 Dinesh Sharma. -----Petitioner. Vs. Chief Commissioner of Income Tax. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE ALOK SINGH Present:- Ms. Radhika Suri, Advocate for the petitioner. --- ORDER: 1. This petition seeks quashing of order dated 18.12.2009, Annexure P-1, passed by the Chief Commissioner of Income Tax, rejecting application for waiver of interest under Section 158 BFA1(a) of the Income Tax Act, 1961 (for short, “the Act”) for the assessment years covering assessing years 1988- 99. 2. After a search was carried out at the premises of the assessee on 20.11.1997, notice under Section 158BC of the Act was issued, requiring the assessee to file return. Accordingly, return dated 27.8.1999 was filed after expiry of the statutory period. Block assessment was completed and undisclosed CWP No.259 of 2010 income was assessed. The assessee approached the Settlement Commission. The Commission disposed of the matter under Section 245 D(4) of the Act on 12.12.2003. As regards interest, it was held that the assessee will be liable to pay interest under Section 158BFA(1)(a) of the Act. The assessee filed an application for waiver of interest before the Chief Commissioner of Income Tax relying upon circular issued by the CBDT dated 6.1.2003. The Chief Commissioner dismissed the application by holding that in view of provisions of Section 245-I, the order of the Commission could not be amended and the Chief Commissioner could not waive interest contrary to the decision of the Commission that the assessee was liable to pay interest. 3. We have heard learned counsel for the petitioner. 4. Main contention put forward by learned counsel is that waiver of interest does not amount to modification of the decision of the Commission. Power of waiver is available only with the Chief Commissioner and is exercised after liability to pay interest has been crystalised. Reliance has been placed on judgment of Gujarat High Court in Smt. Kherunissa Allibhai v. Commissioner of Income-Tax [1978] 113 ITR 443 wherein dealing with provisions of Section 273A of the Act for waiver of penalty, it was observed that even if liability to pay was not disputed, the waiver was permissible. Similar observations have been made in the judgment of Bombay High Court in B.R. Sound-N-Music v. O.P. Bhardwaj and another [1988] 173 ITR 2 CWP No.259 of 2010 433. Reliance has also been placed on judgment of the Hon’ble Supreme Court in Commissioner of Income-Tax v. Anjum M.H.Ghaswala and others [2001] 252 ITR 1, wherein it was observed that provision for waiver could be available to the assessee who has approached the Settlement Commission, for which purpose the Settlement Commission could exercise power of an income tax authority under the Act though the Commission was not otherwise subordinate to the Board. 5. We are unable to accept the submissions. The working of the Commission under the scheme of law is sui generis and is not at par with the assessing authorities. Even though after the liability to pay interest is crystalised, it may be permissible to waive interest in accordance with the circular by an income tax authority, the said power cannot be exercised by any other authority in respect of the matter dealt with by a Commission, particularly when the Commission expressly directs levy of interest. Even if the Commission may be able to waive of the interest, if so provided under a particular circular, such power cannot be exercised by any other authority in the matter dealt with by the Commission. We, thus, do not find any infirmity with the view taken by the Chief Commissioner in rejecting the application of the assessee. 6. Learned counsel for the petitioner, however, argued that the petitioner could approach the Commission itself for the relief. 3 CWP No.259 of 2010 7. We do not express any opinion in this regard. If the petitioner has any such legal right to approach the Commission, it can take such remedy in accordance with law. 8. The petition is disposed of. (ADARSH KUMAR GOEL) JUDGE January 12, 2010 ( ALOK SINGH ) ashwani JUDGE 4 "