Y.MADHAVAN NAIR V. CHIEF COMMISSIONER OF INCOME TAX

WP(C)/33000/2005

AI Insights

The case involves M. Madhavan Nair, the petitioner, who received enhanced compensation for land acquisition, which included interest for the years 1990-91, 1991-92, and 1992-93. The petitioner filed revised income tax returns for these periods, which were regularized by the Income Tax Officer. However, interest was levied under Sections 234A & B of the Income Tax Act. The petitioner sought a waiver for the interest under Section 234B, which was denied by the Chief Commissioner of Income Tax, although the waiver for Section 234A was granted. The petitioner contested this decision in the High Court, arguing that the interest income was not anticipated at the time of filing the returns and was promptly taxed upon receipt. The court agreed with the petitioner, leading to the waiver of the interest under Section 234B.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 770929 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 30-11-2012
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH; P K R MENON; GEORGE K GEORGE
• Assessee Lawyers: P BALAKRISHNAN
• Keywords: Advance tax; Land acquisition compensation; Revised Returns; Waiver of interest
• Section: 148; 234B; 234A; 119(2)(a)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE B.P.RAY FRIDAY, THE 30TH DAY OF NOVEMBER 2012/9TH AGRAHAYANA 1934 WP(C).No. 33000 of 2005 (C) --------------------------- PETITIONER(S) : ---------------------- M.MADHAVAN NAIR, KRISHNA NIVAS, MARIKUNNU P.O. CALICUT. BY ADV. SRI.P.BALAKRISHNAN (E) RESPONDENT(S) : ----------------------- 1. THE CHIEF COMMISSIONER OF INCOME TAX,COCHIN. 2. THE INCOMETAX OFFICER, WARD 4, DIVISION I, CALICUT. R BY ADV. JOSE JOSEPH, SC, R, BY ADV. SRI.P.K.R.MENON,SR.COUNSEL,GOI(TAXES) R, BY ADV. SRI.GEORGE K. GEORGE, SC THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 30-11-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: BP WP(C).No. 33000 of 2005 APPENDIX PETITIONER'S EXHIBITS : P1: COPY OF THE PETITION DT 5/4/2001 ADDRESSED TO THE 1ST RESPONDENT P2: COPY OF ORDER UNDER SECTION 119(2)(a) OF THE 1ST RESPONDENT DT 18/8/2005 IN FILE NO. CC.CHN/W.1/CLT.11/2001-02. RESPONDENT'S EXHIBITS : NIL. //TRUE COPY// P.A. TO JUDGE BP B.P. RAY, J. - - - - - - - - - - - - - - - - - W.P.(C) No. 33000 of 2005 - - - - - - - - - - - - - - - - Dated this the 30th day of November, 2012. JUDGMENT Heard the learned counsel for the petitioner and the learned Standing Counsel for Income Tax Department, Shri. Jose Joseph. 2. During the year 1997-98, the petitioner has received enhanced compensation on land acquisition which include interest for the years 1990-91, 1991-92 and 1992-93. The petitioner filed revised returns of income for the above periods on 10.03.1998. The 2nd respondent regularised the returns of income so filed by issue of notice under Section 148 of the Act on 23.01.2001. Thereafter, the 2nd respondent levied interest under Sections 234A & B of the Income Tax Act. The petitioner filed a petition dated 05.04.2001 before the 1st respondent seeking to waive the interest explaining the reason for non payment of advance tax. The 1st respondent by Ext.P2 order rejected the prayer for waiver of interest under Section 234B of the Act and allowed the waiver of interest levied under Section 234A of the Act. Hence this writ petition. W.P.(C) No. 33000/2005 -:2:- 3. The learned Standing Counsel relying on circular dated 23.05.1996 issued by the CBDT contended that the Chief Commissioner could not have waived the interest as the same does not come within the parameters of the circular. 3. The learned counsel for the petitioner submitted that the receipt of interest income was not in the contemplation of the petitioner at the time of filing the returns and the petitioner filed revised returns and paid tax on the interest income soon after receipt of it. Hence, according to the counsel, there is no delay in paying tax on the interest income and the levy of interest is quite unwarranted. 4. I have considered the contentions of the parties. In my considered view, having regard to the peculiar facts of this case, it is a fit case to waive the interest levied and the first respondent has not exercised his discretion in a proper or judicious manner. Accordingly, the impugned order is quashed. The interest levied in this case under Section 234B shall stand waived. This writ petition is allowed. sd/-B.P. RAY, JUDGE. rv W.P.(C) No. 33000/2005 -:3:- "