SUBHASH SHARMA V. CHIEF COMMISSIONER OF INCOME TAX AND ANOTHER

WPMS/2191/2007

AI Insights

The case involves Subhash Sharma, the petitioner, who challenged the order of the Commissioner of Income Tax, Dehradun, which rejected his application for waiving interest on late payment of advance tax. The rejection was based on the grounds that the petitioner did not fulfill the necessary conditions for a waiver as outlined in a circular dated 23.5.1996. The court heard arguments from both parties and concluded that the petitioner did not fall into any of the specified categories that would justify a waiver of the interest charges under the Income Tax Act.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 684664 (HC-UTTARAKHAND)
• Appeal Type: Others
• Pronouncement Date: 05-11-2012
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: H M BHATIA
• Assessee Lawyers: D S PATNI
• Keywords: Advance tax; Financial losses; Waiver of interest; Fiscal matter
• Section: 132; 234B; 234C

Judgement Text

" IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL WRIT PETITION NO. 2191 OF 2007 (M/S) Subhash Sharma ……..Petitioner. Versus The Chief Commissioner of Income Tax and another ….Respondents. Present: Mr. D.S. Patni, Advocate for the petitioner. Mr. H.M. Bhatia, Advocate for the respondents. Hon’ble Sudhanshu Dhulia, J. (Oral) 1. Heard Mr. D.S. Patni, Advocate for the petitioner and Mr. H.M. Bhatia, Advocate for the respondents. 2. The petitioner has challenged the order dated 29.12.2006 passed by the Commissioner of Income Tax, Dehradun by which the application of the petitioner for waiving of interest on late payment of advance tax has been rejected. The ground given by the revenue authority while rejecting the application of the petitioner vide order dated 29.12.2006 is that the assessee (i.e. the petitioner) do not fulfill the necessary conditions for waiver of interest. These conditions are primarily two – (a) the assessee should file return of income for the relevant assessment year and pay the entire tax due on the income assessed except the amount of interest for which reduction or waiver has been requested for and (b) the assessee should fall in one of the five classes of cases 2 mentioned in Circular dated 23.5.1996, which are as under : “(a) Where during the course of proceedings for search and seizure u/s 132 of the Income Tax Act, or otherwise, the books of account and other incriminating documents have been seized and for reasons beyond the control of the assessee, he has been unable to furnish the return of income for the previous year during which the action u/s 132 has taken place, within the time specified in this behalf and the Chief Commissioner or as the case may be Director General is satisfied having regard to the facts and circumstances of the case that the delay in furnishing such return of income cannot reasonably be attributed to the assessee. (b) Where during the course of search and seizure operation u/s 132 of the Income Tax Act, cash is seized which is not allowed to be utilized for payment of advance tax instalment or instalments as they fall due after the seizure of cash and the assessee has not paid fully or partly advance tax on the current income and the Chief Commissioner or the Director General is satisfied that the assessee is unable to pay the advance tax. (c) where any income chargeable to income-tax under any head of income, other than ‘capital gains’ is received or accrues after the due date of payment of the first or subsequent instalments of advance tax which was neither anticipated nor was in the contemplation of the assessee and the advance tax on such income is paid in the remaining instalment or instalments and the Chief Commissioner or Director General is satisfied on the facts and circumstances of the case that this is a fit case for reduction or waiver of interest chargeable u/s 234C of the Income Tax Act. (d) Where any income which was not chargeable to income-tax on the basis of any order passed in the case of any assessee by the High Court within whose jurisdiction he is assessable to income tax, and as a result, he did not pay income- tax in relation to such income in any previous year and subsequently, in consequence of any retrospective amendment of law or as the case may be the decision of the Supreme Court in his own case, which event has taken place after the end of any such previous year, in any assessment or reassessment proceedings the advance tax paid by the assessee during the financial year immediately 3 preceding the relevant assessment year is found to be less than the amount of advance tax payable on his current income, the assessee is chargeable to interest u/s 234B or section 234C and the Chief Commissioner or Director General is satisfied that this is a fit case for reduction or waiver of such interest. (e) Where a return of income could not be filed by the asessee due to unavoidable circumstances and such return of income is filed voluntarily by the assessee for his legal heirs without detection by the AO.” 3. The revenue authority while rejecting the application for waiving of the interest of advance tax has come to the conclusion that though the first condition has been fulfilled by the assessee as he has paid the entire advance tax for the assessment year 1995-96, however, the interest cannot be waived as he does not fulfill the second condition which is that he does not fall in any of the five categories stipulated in the Circular dated 23.5.1996. 4. The only ground taken by the assessee for payment of advance tax belatedly is that he suffered financial losses in his publication business. However, such a ground does not exist in the circular dated 23.5.1996 in order to grant exemption to the petitioner for payment of interest of late advance tax. Therefore, the revenue authority has rightly come to the conclusion that such waiver cannot be granted to the petitioner. Since this is a fiscal matter and has to be construed strictly, this Court after perusing the circular dated 23.5.1996 comes to a conclusion that the findings of the revenue authority on this aspect are indeed correct. Since the petitioner does not fall under the exemption category such exemption cannot be given to the petitioner. No interference 4 therefore is called for with the order of the revenue authority dated 29.12.2006. 5. Writ petition fails and is hereby dismissed. 6. Interim order, if any, stands vacated. 7. No order as to costs. (Sudhanshu Dhulia, J.) 5.11.2012 Avneet "