S.SUNITHA V. CHIEF COMMISSIONER OF INCOME TAX

WP(C)/25773/2005

AI Insights

The case involves Smt. S. Sunitha, the petitioner, whose husband died in a road accident, leading to a compensation award from the Motor Accident Claims Tribunal, Chennai. The compensation included interest, which the petitioner paid tax on. However, she was later directed to pay interest on the delayed payment of income tax on this interest income. The petitioner contested this, arguing that the interest income was unanticipated and that she had paid the tax promptly upon receipt. The Income Tax Department, represented by the Standing Counsel, argued that the case did not fall within the parameters set by a CBDT circular for waiving interest on delayed tax payments. The court, after considering the unique circumstances of the case and the prompt tax payment by the petitioner, decided in favor of the petitioner, waiving the additional interest charges.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 758877 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 30-11-2012
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: P K R MENON; GEORGE K GEORGE; JOSE JOSEPH
• Assessee Lawyers: P BALAKRISHNAN
• Keywords: Advance tax; Income Tax; Interest on delayed payment; Revised return; Waiver of interest
• Section: 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. 25773 of 2005 (R) --------------------------- PETITIONER: --------------- SMT. S.SUNITHA, D/O.DR.M.SIVATHANU PILLAI, SAROVAR, VENNAKKARA PALAKKAD. BY ADV. SRI.P.BALAKRISHNAN (E) RESPONDENTS: ----------------- 1. THE CHIEF COMMISSIONER OF INCOME TAX, COHIN. 2. THE INCOME TAX OFFICER, WARD I, PALAKKAD. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.GEORGE K. GEORGE, SC FOR IT SRI. JOSE JOSEPH, SC, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 30-11-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 25773 of 2005 (R) : 2 : APPENDIX PETITIONER'S EXHIBITS: EXT.P1 : TRUE COPY OF PETITION DATED 12.08.2000 ADDRESSED TO THE 1ST RESPONDENT. EXT.P2 : TRUE COPY OF ORDER UNDER SECTION 119(2)(a) OF THE INCOME TAX ACT, 1961 IN F.NO.CC.CHN/W1/CLT.57/2000-01 DATED 11.05.2005 OF THE 2ND RESPONDENT. RESPONDENTS' EXHIBITS: NIL //TRUE COPY// P.A. TO JUDGE rv B.P. RAY, J. - - - - - - - - - - - - - - - - - W.P.(C) No. 25773 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, Shri. Jose Joseph. 2. The petitioner's husband who was working in the Salem Steel Plant, died in a road accident at Chennai on 14.11.1992. On 30.03.1999, the Motor Accident Claims Tribunal, Chennai awarded compensation and interest to the petitioner and the petitioner received the compensation along with interest in February, 2000. Even though the petitioner has paid the tax on interest portion of the award received by her, she has been directed to pay interest on the tax payable for delayed payment of income tax. The petitioner had paid the income tax on 31.03.2000 by filing a revised return. But the authorities have levied `82,000/- as interest. 3. The learned Standing Counsel appearing for the Department submits that the Commissioner has been empowered under circular dated 23.05.1996 issued by the CBDT to waive interest only in the classes of cases mentioned therein W.P.(C) No.25773/2005 -:2:- and the petitioner's case does not come within the parameters of the circular. 4. In this case interest under Section 234A and 234B of the Income Tax Act was levied for non-payment of advance tax on the interest income received after the due date for filing returns for the years involved. The counsel for the petitioner pointed out that the advance tax on this case could not be paid since the receipt of any interest income was uncertain and unanticipated and not in the contemplation of the petitioner at the time of filing the returns. He also submitted that the petitioner filed revised returns and paid the tax on the interest income soon after receipt of it and under these circumstances, it cannot be proceeded as if the petitioner failed to pay advance tax. The counsel further submitted that, at any rate, the 2nd respondent should have waived the interest levied in this case in exercise of the discretion conferred on him under the CBDT Notification dated 23.05.1996 in view of the peculiar facts obtained in this case. 5. I have considered the contentions. Having regard to the peculiar facts obtained in this case, I am of the view that this is a fit case to waive the interest levied under Section 234A and W.P.(C) No.25773/2005 -:3:- 234B of the Act and the 2nd respondent failed to exercise the discretion conferred on them under the CBDT Notification dated 23.05. 1996 in a proper and judicious manner. 6. In my considered view, there is no delay in payment of tax on the interest income, since the petitioner filed revised returns and paid tax immediately after receipt of the interest income. Accordingly, the interest demanded under Sections 234A and 234B of the Act is waived and the impugned order is quashed. This writ petition is allowed as above. sd/- B.P. RAY, JUDGE. rv W.P.(C) No.25773/2005 -:4:- "