THE MATHRUBHUMI PRINTING AND PUBLISHING COMPANY LIMITED V. UNION OF INDIA

WP(C)/9180/2012

AI Insights

The case revolves around The Mathrubhumi Printing and Publishing Company Limited, which contested the interest levied on them following a rectification order under Section 154 of the Income Tax Act for the assessment year 1988-1989. Initially, the company was allowed deductions under both Section 32A and Section 32AB, but the authorities later rectified this to allow only the deduction under Section 32A. The company challenged this rectification and subsequent interest levies, which led to a legal battle involving multiple petitions and appeals. The Income Tax Department had reduced the interest by 50%, but the company sought a complete waiver, arguing that the delay in assessment was not entirely attributable to them. The court, referencing a previous judgment, noted that the discretion to waive or reduce interest lies with the tax authorities and not as a matter of right with the assessee.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 743976 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 01-11-2017
• Assessment Year: misc
• Other Referred Cases: Deputy Commissioner of Income Tax vs. P.M Antony
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: P K R MENON
• Assessee Lawyers: M NAMBIAR; P GOPINATH
• Keywords: Assessment Year; Rectification Order; Waiver of interest; Deduction under Section 32A and 32AB
• Section: 154; 264; 215

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE WEDNESDAY, THE 1ST DAY OF NOVEMBER 2017/10TH KARTHIKA, 1939 WP(C).No. 9180 of 2012 (V) ----------------------------------------- PETITIONER(S) : ------------------------- THE MATHRUBHUMI PRINTING AND PUBLISHING COMPANY LIMITED, K.P KESAVA MENON ROAD, KOZHIKODE-673 001, REPRESENTED BY ITS MANAGING DIRECTOR, MR. M.P.VEERENDRAKUMAR. BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH SRI.P.BENNY THOMAS SRI.K.JOHN MATHAI SRI.PRATHAP.G.PADICKAL RESPONDENT(S) : ----------------------------- 1. UNION OF INDIA, REPRESENTED BY ITS SECRETARY, MINISTRY OF FINANCE, NEW DELHI-110 004. 2. COMMISSIONER OF INCOME TAX, AAYAKAR BHAWAN, NORTH BLOCK, KOZHIKODE-673 001. 3. JOINT COMMISSIONER OF INCOME TAX, RANGE 1, KOZHIKODE-673 001. 4. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE (1), KOZHIKODE-673 001. BY SRI.P.K.R.MENON (SENIOR ADVOCATE) ADV. SRI.JOSE JOSEPH, S.C THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01-11-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Msd. WP(C).No. 9180 of 2012 (V) ----------------------------------------- APPENDIX PETITIONER(S)' EXHIBITS : EXT-P1 TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 1998-89 DATED 19.12.1990 ISSUED BY THE DEPUTY COMMISSIONER OF INCOME TAX(ASSMT), SPECIAL RANGE, KOZHIKODE TO THE PETITIONER. EXT-P2 TRUE COPY OF THE RECTIFICATION ORDER DATED 12.03.1992 ISSUED BY THE DEPUTY COMMISSIONER OF INCOME TAX (ASSMT),SPECIAL RANGE, KOZHIKODE TO THE PETITIONER. EXT-P3 TRUE COPY OF THE PETITION FOR WAIVER DATED 16.04.1992 FILED BEFORE THE DEPUTY COMMISSIONER OF INCOME TAX (ASSMT),SPECIAL RANGE, KOZHIKODE BY THE PETITIONER. EXT-P4 TRUE COPY OF THE ORDER DATED 26.08.1992 ISSUED BY THE COMMISSIONER OF INCOME TAX(APPEALS)TO THE PETITIONER. EXT-P5 TRUE COPY OF THE MODIFIED ORDER DATED 19.10.1992 ISSUED BY THE DEPUTY COMMISSIONER OF INCOME TAX (ASSMT), SPECIAL RANGE, KOZHIKODE TO THE PETITIONER. EXT-P6 TRUE COPY OF THE ORDER DATED 04.09.2001 ISSUED BY THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH TO THE PETITIONER. EXT-P7 TRUE COPY OF THE JUDGMENT OF THE HONOURABLE HIGH COURT IN ITA.45 OF 2002 DATED 11.02.2008 ISSUED TO THE PETITIONER. EXT-P8 TRUE COPY OF THE ORDER DATED 19.11.2008 ISSUED BY THE ASSISTANT COMMISSIONER OF INCOME TAX TO THE PETITIONER. EXT-P9 TRUE COPY OF THE WAIVER PETITION DATED 09.02.2009 FILED BY THE PETITIONER BEFORE THE ASST.COMMISSIONER OF INCOME TAX. EXT-P10 TRUE COPY OF THE ORDER UNDER SECTION 215(4)OF THE INCOME TAX DATED 12.02.2009 ISSUED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE(I), KOZHIKODE TO THE PETITIONER. EXT-P11 TRUE COPY OF THE REVISION PETITION DATED 09.03.2009 FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX EXT-P12 TRUE COPY OF THE REVISION PETITION DATED 23.07.2009 FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX. WP(C).No. 9180 of 2012 (V) ----------------------------------------- EXT-P13 TRUE COPY OF THE PETITION DATED 12.08.2009 FILED BY THE PETITIONER BEFORE THE ADDITIONAL COMMISSIONER OF INCOME TAX. EXT-P14 TRUE COPY OF THE ORDER OF THE 2ND RESPONDENT DATED 28.03.2011 ISSUED TO THE PETITIONER. EXT-P15 TRUE COPY OF THE ORDER DATED 31.03.2011 ISSUED BY THE 3RD RESPONDENT, JOINT COMMISSIONER OF INCOME TAX UNDER SECTION 215(4) OF THE INCOME TAX ACT, READ WITH RULE 40(5) OF THE INCOME TAX RULES TO THE PETITIONER. EXT-P16 TRUE COPY OF THE REVISION PETITION DATED 31.10.2011 UNDER SECTION 264 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXT-P17 TRUE COPY OF THE ORDER DATED 14.12.2011 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. RESPONDENT(S)' EXHIBITS : NIL //TRUE COPY// P.S.TO JUDGE. Msd. A. MUHAMED MUSTAQUE, J. ------------------------------------ W.P. (C) No.9180 of 2012 ------------------------------------ Dated this the 1st day of November, 2017 J U D G M E N T This writ petition is filed by the assessee aggrieved by levying of interest consequent upon the order passed under Section 154 of the Income Tax Act. For the assessment year 1988-1989, the assessee was allowed deduction under Section 32A as well as under Section 32AB. Finding that both requests cannot be granted, only deduction under Section 32A was permitted. An order has been passed rectifying the order of determination by invoking the power under Section 154 of the Act. There was a challenge against this order. Ultimately, this Court upheld the claim of the revenue by Ext.P7 judgment. As of now, the matter is concluded as regard to the rectification order. 2. The assessee thereafter claimed waiver of interest. That was allowed by Ext.P15 to the extent of 50%. Again, not being satisfied with the above reduction, the assessee approached the Commissioner of Income Tax invoking the power under W.P.(C) No.9180/2012 2 Section 264 of the Income Tax Act, However, the Commissioner did not interfere with the order passed by the 3rd respondent. Challenging the above orders, the petitioner approached this Court. 3. Learned counsel for the petitioner, particularly pointing out the finding of the 3rd respondent in Ext.P15, argued that the petitioner is entitled for waiver of interest in terms of Rule 40 of the Income Tax Rules, 1962. Learned counsel drew my attention to the relevant paragraph in Ext.P15 order which reads as follows: “On the other hand, the delay in completion of assessment cannot be entirely attributed to the assessee since it is only natural for heavy cases to consume more time to arrive at the correct decision. In this case also, the longdrawn legal battle, whether warranted or not, indicates the gravity of the issue to be decided”. Thus it is argued that when delay is not attributable to the assessee, no interest would have been levied from the assessee. 4. Per contra, learned Standing Counsel appearing for the Income Tax Department, relying upon the judgment of this Court in Deputy Commissioner of Income Tax vs. P.M Antony W.P.(C) No.9180/2012 3 ((2002) 257 ITR 616), argued that Rule 40 is only an enabling provision and the discretion is left to the authority to decide whether waiver or reduction has to be granted. 5. The authorities having exercised their discretion with relevant material, it is beyond the scope of this Court to sit upon their wisdom. It is to be noted that Rule 40 is only an enabling provision and the assessee cannot as a matter of right claim waiver of interest or reduction. The guidelines as referred under Rule 40 have to be understood in the mandate of levying of interest under Section 215 of the Income Tax Act. Therefore, merely because there is an observation that delay cannot be attributed to the assessee itself, that will not result in waiver of interest. Taking note of the over all facts involved, the authority had given 50% of reduction of interest. In the above circumstances, this Court finds no reason to interfere with the impugned orders. This writ petition is dismissed. Sd/- A. MUHAMED MUSTAQUE JUDGE smp "