K.SREEDHARAN AND COMPANY V. ASST.COMMISSIONER OF INCOME TAX

WP(C)/29885/2007

AI Insights

The case involves K. Sreedharan and Company, the petitioner, who contested the interest levied under Sections 234A and 234B of the Income Tax Act for the assessment year 1994-95. After the differential tax was demanded and confirmed by the Appellate Tribunal, the Assessing Officer levied interest, which the petitioner challenged. The 2nd respondent partially waived the interest under Section 234A, but the petitioner sought a further waiver, leading to this writ petition. The court examined whether the 2nd respondent had validly exercised discretion under Section 119(2) of the Income Tax Act in the waiver decision.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 765956 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 08-12-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: P K R MENON; JOSE JOSEPH
• Assessee Lawyers: MILLU DANDAPANI
• Keywords: Assessment; Differential tax; Income Tax; Interest Levy; Waiver
• Section: 234B; 234A; 119(2)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR MONDAY, THE 8TH DAY OF DECEMBER 2014/17TH AGRAHAYANA, 1936 WP(C).No. 29885 of 2007 (G) ---------------------------- PETITIONER(S): -------------------------- K.SREEDHARAN AND COMPANY THALIKAVU, KANNUR, REPRESENTED BY ITS MANAGING PARTNER K.SREEDHARAN. BY ADV. SRI.MILLU DANDAPANI RESPONDENT(S): ---------------------------- 1. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 2 (I), KANNUR. 2. CHIEF COMMISSIONER OF INCOME TAX ERNAKULAM, COCHIN-682 018. R, BY ADV. SRI.P.K.R.MENON,SR.COUNSEL,GOI(TAXES) R, BY ADV. SRI.JOSE JOSEPH, SC FOR IT THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08-12-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).NO.29885/2007 APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF ORDER DATED 16.7.2002 ISSUED BY FIRST RESPONDENT. EXT.P2: COPY OF PETITION DATED 15.1.2003 SUBMITTED BY PETITIONER BEFORE THE 2ND RESPONDENT. EXT.P3: COPY OF WRITTEN SUBMISSION DATED 10.3.2007 SUBMITTED BEFORE THE 2ND RESPONDENT. EXT.P4: COPY OF ORDER NO.CC.CHN/W1/KNR-21/2002-03 DATED 13.3.2007 ISSUED BY 2ND RESPONDENT. EXT.P5: COPYH OF RELEVANT EXTRACT OF NOTIFICATION NO.400/234/95-IT(B) DATED 23.5.1996 ISSUED BY CENTRAL BOARD OF DIRECT TAXES. EXT.P6: COPY OF NOTIFICATION NO.400/129/2002-IT(B) DATED 26.6.2006 ISSUED BY CENTRAL BOARD OF DIRECT TAXES. RESPONDENTS EXHIBITS: NIL. //TRUE COPY// P.S. TO JUDGE A.K.JAYASANKARAN NAMBIAR, J. ------------------------------- W.P.(C).NO.29885 OF 2007 (G) ----------------------------------- Dated this the 8th day of December, 2014 J U D G M E N T The petitioner is an assessee under the Income Tax Act, 1961. In respect of the assessment for the year 1994-95, amounts were charged towards interest under Sections 234A and 234B of the Income Tax Act. The assessment of the petitioner for the said year was completed by demanding differential tax. Although the assessee carried the matter in appeal, the proceedings culminated in an order of the Appellate Tribunal confirming the demand of differential tax on the assessee. In the consequential order that was passed by the Assessing Officer, interest under Sections 234A and 234B of the Income Tax Act was also levied. Aggrieved by the levy of interest under the said provisions, the petitioner preferred an application under Section 119(2) of the Income Tax Act which came to be disposed by the 2nd respondent by Ext.P4 order whereby, the 2nd respondent waived the interest levied under Section 234A of the Income Tax Act to an extent of 1/3 rd of the amount levied. In the writ petition, Ext.P4 order of the 2nd respondent is impugned inter alia on W.P.(C).No.29885/2007 2 the ground that while passing the said order, the 2nd respondent had not validly exercised the discretion conferred on him under Section 119(2) of the Income Tax Act. 2. I have heard Sri.Millu Dandapani, the learned counsel appearing on behalf of the petitioner as also Sri.Jose Joseph, the learned Standing counsel appearing on behalf of the Income Tax Department. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I find that the 2nd respondent Chief Commissioner of Income Tax, while passing Ext.P4 order, was acting strictly in accordance with Ext.P6 instructions issued by the Central Board of Direct Taxes in the matter of grant of waiver of interest. While considering the case of the petitioner, and taking note of the peculiar circumstances that were projected by him as a reason for the delay in remitting the tax amount, the 2nd respondent deemed it appropriate to grant a limited waiver to the extent of 1/3 rd of the interest levied under Section 234A of the Income Tax Act. Ext.P4 order of the 2nd respondent cannot be said to be in W.P.(C).No.29885/2007 3 any way vitiated by an error of law or an erroneous exercise of discretion. In that view of the matter therefore, I see no reason to interfere with the said order in the present writ petition. Resultantly, the writ petition fails, and is accordingly dismissed. A.K.JAYASANKARAN NAMBIAR JUDGE prp "