SHAHINA BABU V. THE CHIEF COMMISSIONER OF INCOME TAX

WP(C)/1595/2012

AI Insights

The case involves Shahina Babu, the petitioner, who sought a full waiver of interest on delayed tax payments under Section 220(2A) of the Income Tax Act. The Commissioner granted a 50% waiver but denied the full waiver. The petitioner challenged this decision, arguing that she met all the conditions for a full waiver. The court reviewed the Commissioner's decision and found it to be within the legal framework, noting that the petitioner had sufficient assets and income, which justified the partial waiver. The court also provided an option for the petitioner to pay the remaining interest in installments.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 699888 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 19-01-2012
• Assessment Year: misc
• Other Referred Cases: GTN Textiles Ltd. v. Deputy Commissioner of Income Tax and Another, Dr.K.Parameswaran Nair v. Assistant Commissioner of Income Tax and another
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: D KISHORE; MINI GOPINATH
• Keywords: Discretionary power; Genuine hardship; Waiver of interest; Liquidity problem
• Section: 220(2A)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC THURSDAY, THE 19TH DAY OF JANUARY 2012/29TH POUSHA 1933 WPC.No. 1595 of 2012 (Y) ------------------------ PETITIONER: --------- SHAHINA BABU W/O. LATE K.V. NAUSHAD ALI BABU A/104-BHARATHI-I APARTMENTS, SHERLY RAJAN ROAD NEAR RISWI COLLEGE, BANDRA, WEST MUMBAI-400050 BY ADVS.SRI.D.KISHORE SMT.MINI GOPINATH RESPONDENT(S): -------------- 1. THE CHIEF COMMISSIONER OF INCOME TAX, OFFICE OF THE CHIEF COMMISSIONER OF INCOME TAX, CR BUILDINGS, I.S. PRESS ROAD, COCHIN-682018. 2. THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE-I, CR BUILDINGS, I.S.PRESS ROAD COCHIN-682018. 3. THE TAX RECOVERY OFFICER (INCOME TAX) RANGE-I, C.R. BUILDINGS, I.S.PRESS ROAD, COCHIN-682018. BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19-01-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: RK WPC.No. 1595 of 2012 (Y) ------------------------ APPENDIX PETITIONERS EXHIBITS: EXT.P1: COPY OF THE RODER DATED 29.11.2004 OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN ITA-24/D1/INV/E/CIT-V/01/02. EXT.P2: COPY OF THE COMMON ORDER DATED 23.06.2009 OF INCOME TAX APPELLATE TRIBUNAL. EXT.P3: COPY OF THE REPRESENTATION DATED 23.04.2010 SUBMITTED BY THE PETITIONER BEFORE THE IST RESPONDENT. EXT.P4: COPY OF THE REPRESENTATION DATED 4.1.2011 SUBMITTED BY THE PETITIONER BEFORE THE IST RESPONDENT. EXT.P5: COPY OF THE REPRESENTATION DATED 4.1.2011 SUBMITTED BY THE PETITIONER BEFORE THE 3RD RESPONDENT. EXT.P6: COPY OF THE PROCEEDINGS NO.TR11 EKM/R-1/2007/08 DATED 31.3.2011 OF 3RD RESPONDENT. EXT.P7: COPY OF THE JUDGEMENT DATED 6.5.2011 IN W.P.(C) 12819/2011 OF THIS HON'BLE COURT. EXT.P8: COPY OF THE ORDER DATED 01.11.2011 OF THE 1ST RESPONDENT. EXT.P9: COPY OF THE CASH FLOW STATEMENT OF THE PETITIONER SUBMITTED BEFORE THE 1ST RESPONDENT. EXT.P10: COPY OF THE PROCEEDINGS NUMBER TR-11/R-1/KOCHI/07-08 DATED 16.11.2011 OF THE 2ND RESPONDENT. EXT.P11: COPY OF THE PROCEEDINGS NUMBER TR-11/R-1/KOCHI/07-08 DATED 5.1.2012 OF THE 2ND RESPONDENT. RESPONDENT'S EXHIBITS: NIL /TRUE COPY/ PA TO JUDGE RK ANTONY DOMINIC, J ....................................................... W.P.(C).1595/2012 .............................................. Dated this the 19th day of January, 2012 JUDGMENT Petitioner made an application seeking waiver of interest as provided under Section 220(2A) of the Income Tax Act (in short 'the Act'). That application was considered and by Ext.P8 order, waiver to the extent of 50% of the interest due, has been granted. It is complaining denial of waiver to the extent of as sought for, this writ petition has been filed. 2. Heard the learned counsel appearing for the petitioner who mainly contends that although the petitioner has satisfied the three conditions laid down in Section 220(2A) of the Act, the Commissioner has acted illegally in denying full benefits. However, having gone through Ext.P8 order and the provisions contained in Section 220(2A), I am unable to find any illegality in Ext.P8. 3. Section 220(2A) of the Act reads thus. 220(2A)- Notwithstanding anything contained in sub section (2), the Chief Commissioner or Commissioner may reduce or waive the amount W.P.(C).1595/12 2 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 ; (ii). Default in the payment of the amount on which interest has been paid or was payable under the said sub section was due to circumstances beyond the control of the assessee ; and (iii). The assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him. 4. In GTN Textiles Ltd. v. Deputy Commissioner of Income Tax and Another (217 ITR 653 [Ker] ) and Dr.K.Parameswaran Nair v. Assistant Commissioner of Income Tax and another (245 ITR 210 (Ker), relied on by the learned counsel for the Revenue, it has already been held that all the three conditions contained in Section 220(2A) are to be satisfied by an assessee to claim the benefit of the waiver. In this case, the contention of the petitioner for waiver has been considered and the first respondent has held as follows :- “I have carefully considered the application for waiver of interest under Section 220(2). The assessee's legal heir has cooperated with the department in completion of the assessment and in recovery of the demand. It is also seen that the default in payment of tax on which interest under Section 220(2) was charged was due to W.P.(C).1595/12 3 liquidity problem as the legal heir did not have a regular source of income to cover all the liabilities including upkeep and maintenance of the family. At the same time it is noticed that as per the records, the petitioner's husband, the deceased assessee, had acquired many immovable properties in names of himself, his wife the petitioner and in their joint names. Further, as per the lease deed executed by the petitioner on 15.5.08, the office premises in Panampilly Nagar, Ernakulam are let out to Jain Housing and Construction Ltd., for a monthly rent of Rs.60,000/- with effect from 15.6.08, liable to be increased by 5% at the end of every 11th month. On a careful consideration of all the facts and circumstances of the case, I am of the opinion that the payment of the entire interest under Section 220(2) would cause some genuine hardship. However, the applicant does not qualify for full waiver of the interest charged for the belated payment of the demand. Hence interest chargeable under Section 220(2) is ordered to be reduced by 50%.” 5. A reading of this order shows that the Commissioner has found the petitioner eligible for the benefit of Section 220(2A) of the Act and having regard to the fact that the petitioner has various assets in her name and also has many income there from, the Commissioner has not satisfied that the petitioner was eligible for the full waiver. Such exercise of discretionary power of the Commissioner cannot said to be perverse warranting interference in a proceedings under Article 226 of the Constitution of India. W.P.(C).1595/12 4 Therefore, the prayer to interfere with Ext.P8 has to be rejected and I do so. Although I uphold Ext.P8, petitioner seeks an instalment facility to discharge the liability. 6. Heard the learned Standing Counsel on this aspect also. Taking note of the submissions, I direct that the amount due from the petitioner by way of interest shall be permitted to be paid in five equal monthly instalments, first of which shall be paid on or before 15.2.2012 and the remaining instalments will be paid on or before 15th of every succeeding month. Needless to say that in case default is committed in any one of the instalments, Bank will be free to take action for recovery of the amount, in accordance with law. Writ petition is disposed of as above. ANTONY DOMINIC, Judge mrcs /true copy/ P.A. To Judge "