SRI K. RAVI RAJU, SECUNDERABAD V. ASST. COMMISSIONER OF INCOME TAX, HYD AND ANOTHER

WP/17514/2006

AI Insights

The case involves Sri K. Ravi Raju, the petitioner, challenging the levy of interest on delayed filing of income tax return for the assessment year 2000-2001. The interest was initially levied by the Assistant Commissioner of Income Tax and upheld by the Income Tax Appellate Tribunal. The petitioner argued that no interest should be levied, and if it were, the amount should be nil. The High Court, referencing a Supreme Court decision, found that interest is not a penalty but a compensation for delayed tax payment, and since the tax was paid on time, the interest levy was quashed.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 691685 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 28-12-2022
• Assessment Year: misc
• Other Referred Cases: Pranoy Roy v. Commissioner of Income-Tax
• Laws Referred To: Article 226 of the Constitution of India, Section 151 CPC
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J V PRASAD
• Assessee Lawyers: R RANGANATHAN
• Keywords: Assessment year 2000-2001; Delay in filing; Income Tax; Interest Levy; Writ of Certiorari
• Section: 234-4

Judgement Text

"[ 32ss ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY EIGHTH DAY OF DECEMBER TWO THOUSAND AND TWENTY TWO THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE C.V. BHASKAR REDDY wRlT PETITION NO: 17514 OF 2006 Between: Sri K. Ravi Raju, S/o. A.K. Raju, aged 42 years, 38, P & T Colony, Opp: Vikrampuri, Secunderabad 5OO 009 ..PETITIONER AND 1, Assistant Commissioner of lncome Tax, Circle - 10 (1), Hyderabad. 2. Commissioner of lncome Tax, AP-V, Buddha Bhavan, Hyderabad. ...RESPONDENTS Petition under kticle 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ of Certiorari or any other appropriate writ or order or direction under Article 226 under constitution of lndia for : a) Holding that no interest is leviable at all under s.234-4 for assessment year 2000-2001; b) Holding that even if such interest is leviable, the quantum of interest should be calculated as nil (instead of Rs. 1,05,525) in this case ; and c) Quashing the levy of interest contained in the intimation dated 5-3-2002 issued by the first respondent, which was restored by the lncome Tax Appellate Tribunal by its order dated 28-2-2006; l PRESENT Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to prayed that the recovery of the interest of Rs. 1,05,525 may be stated by this Hon'ble Court dur'ng the pendency of the present writ petition, as otherwise the petitioner will be put severe loss an hardship. lA NO: 1 OF 2020 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit fileC in support of the petition, the High Court may be pleased to expedite the hearing of the writ petition in interest of Justice. Counsel for the Petitioner: SRI R. RANGANATHAN Counsel for the Respondents: SRI J.V. PRASAD (SC FOR INCOME TAX) The Court made the following: ORDER l.A. NO: 1 OF 200(;(WPMP. NO: 21951 OF 2006) i-. THE HON'BLE THE CHIEF JUSTICE UJJAL BHIIYAN THE HON'BLE SRT WSTICE C.V.BHASKAR REDDY WRIT PETITION No. 1751 4 of 2o,06 ORDER: (Per the Hon'ble the Chief Justice Ujjat BLugan) Heard Mr. R. Ranganathan, learned counsel for the petitioner and Mr. J.V.Prasad, learned Standing Counsel, Income Tax Department for the respondents. 2. Challenge made in this writ petition is to the lery of interest contained in the intimation dated 05.03.2002 issued bv the 1\"t respondent. 3. Without entering into the factual narrative, there is a consensus at the Bar that the issue raised in this writ petition is squarely covered by a decision of the Supreme Court in Pranoy Roy v, Commissioner of Income-Taxl. issue involved is 1er,y of interest for delay in filing the return of income. In this case, though there was delay in filing the return of income, the income tax $.as paid before the due date. It has been held that interest is AND I I ' 2OO9(309) ITR 231 / / I I 2 x HC] & CVBRJ W.P.No.17514 of 2006 not a penalty. Interest is levied by way of compensation to compensate th,: Revenue in order to avoid the Revenue from being deprived of the payment of tax on the due date. Interest would be payable in a case where tax has not beeh deposited prior to the due date of the filing of the income tax return. When the tax due had already br:en paid before the due date, question of levy of interest would not arise. 4. That being the position, intimation dated 05.03.2OO2 is set aside and quashed 5. Writ Petition is accordingly allowed. However, there shall be no ord,:r as to costs. 6. Misr:ellaneous applications pending, if any, in this Writ Petition shall sl.and closed. t Rule Nis i has been made Absolute as above witness the Hon'bte SRl. UJJAL BHUYAN, The Chief Justice on this Wednesday, The Twenty Eighth Day of December, Two Thousand An d Twenty Two. SD/.K.AMMAJI ASSISTANT REGISTRAR ,TRUE COPY// sECilON drrtcen To, 1. The Assistant Commissioner, lncome Tax, Circle - 10 (1), Hyderabad 2. The Commissioner, lncome Tax, AP-V, Buddha Bhavan, Hyderabad. 3. One CC to SRI R. RANGANATHAN, Advocate [OPUC] 4. One CC to SRI J V. PRASAD (SC FoR INCOME TAX) IOPUCI 5. Two CD Copies q BB BS t , / HIGH COURT DATED: 281'1212022 ORDER ALLOWING THE WRIT PETITION WITHOUT COSTS @d(c) tu--^ {,w /< iii; li TA.14. ,3 2023 * C) ;! f) 5 D5 J i.i'i W.P.No.17514 of 2006 "