A.kuberankartha Of V.v.arumugam Chettiar [Huf v. The Chief Commissioner Of Income Tax,Chennai-Vi,Iii Floor, Aayakar Bhawan

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE Mr.JUSTICE T.S.SIVAGNANAMW.P.No.5622 of 2007 A.KuberanKartha of V.V.Arumugam Chettiar ... petitioner Vs. The Chief Commissioner of Income Tax,Chennai-VI,III Floor, Aayakar Bhawan,121, Nungambakkam High Road,Chennai-600 034.... Respondent Prayer:Petition filed under Article 226 of the Constitution ofIndia to issue a Writ certiorari to call for the records on thefile of the respondent in file HQ.19/(40)/02-03/67 dated15.04.2005 and quash the same as illegal and against theNotification NO.F.400/234/95-IT(B), dated 23.05.1996 and todirect the respondent to refund the interest levied underSections 234 A, 234 B and 234 C for the assessment years 1989-90and 1990-91 pending disposal of the above writ petition. For petitioner : Mr.J.Balachandar For Respondent : Mr.A.P.Srinivas, Senior Standing Counsel ORDER Heard Mr.J.Balachander, learned counsel for the petitioner,Mr.A.P.Srinivas, learned Special Government Pleader appearing onbehalf of the respondent. 2.The writ petition has been filed by the assesseechallenging an order passed by the respondent dated 15.04.2005under Section 119 (2) (a) of the Income Tax Act 1961 [for short"the Act”]. This order has been passed based on the applicationfiled by the petitioner dated 29.11.2001, requesting for waiverof interest charged under Sections 234A, 234B and 234C of theAct, amounting to Rs.12.30 lakhs for assessment years 1989-90and 1990-91. https://hcservices.ecourts.gov.in/hcservices/ 3.Before I consider as to whether the petitioner is entitledfor waiver, the following facts should be taken note of. Theassessee has given a statement on oath under Section 132(4)during the course of Search under Section 132 in the premisesconnected with the petitioner. Disclosure was made only afterdetection pursuant to the search. Therefore, it is clear thatthe petitioner's disclosure is not a voluntary disclosure beforethe Department. The sworn statement was recorded on 17.08.1990and subsequently, the Assessing Officer issued notice underSection 148 of the Act on 19.08.1991. The Assessee did nothingthereafter, but it appears that after several notices wereissued, the Assessee filed return on 07.01.1994 and subjectedfor assessment. In the background of the conduct of the Assesseeit has to be seen as to whether the Assessee is entitled to thewaiver of the statutory interest payable under Sections 234A,234B and 234C of the Act. 4.The Hon'ble Division Bench in the case of ChiefCommissioner of Income Tax Vs. Rajanikant & Sons reported in[2017] 83 taxmann.com 162 (Madras) / [2017] 396 ITR 171(Madras). While, considering the scope and ambit of Circulardated 26.06.2006 took note of the circumstances under which theChief Commissioner and/or the Director General of Income Taxwould have power to reduce or waive interest. At this juncture,it is worthwhile to refer a few paragraphs of the said judgment: “11.2.Therefore, what is required to be seen iswhat is the scope and ambit of the circular dated26.06.2006. A bare perusal of the Circular would showthat the CBDT has delegated its power to the ChiefCommissioner and / or the Director General of IncomeTax to reduce or waive interest charged under Section234A or under Section 234B or under Section 234C ofthe 1961 Act, in the classes of cases or classes ofincomes specified in paragraph 2 of the said Circular.11.3The extent to which the said delegatees,i.e., Chief Commissioner/Director General of IncomeTax, may waive or reduce the interest has been left totheir discretion. 11.4Furthermore, the Circular makes it clear thatno reduction or waiver of interest under theprovisions referred to above shall be ordered, unlessthe assessee has filed a return of income for therelevant AY and paid the entire income tax (principalcomponent of demand due on the income, as assessed). 11.4Furthermore, the Circular makes it clear thatno reduction or waiver of interest under theprovisions referred to above shall be ordered, unlessthe assessee has filed a return of income for therelevant AY and paid the entire income tax (principalcomponent of demand due on the income, as assessed). 11.6Therefore, what emanated upon perusal of theCircular is that, unless the Assesse's case fallsunder the circumstances set out in paragrapg 2(a) to 2(d) of the Circular dated 26.06.2006, which includesclasses of cases and / or classes of incomes, theChief Commissioner/Director General of Income Tax has no power to reduce or waive interest.11.7In the instant case, as indicated in thenarration of facts above, though returns were filedfor the subject periods, the assessment made in theusual and normal course, was reopened under Section148 of the 1961 Act. The reassessed tax was paid onlyafter the Revenue had passed the reassessment order.As noted above, the assessee, at that stage, asadvised, it appears, has also paid interest undersections 234A, 234B and 234C of the 1961 Act.” 6.Thus, the discretion conferred upon the respondent isclearly circumscribed and set out in paragraphs 2(a) to 2(d) ofthe Circular dated 26.06.2006. The right to claim waiver of theinterest is not a statutory right given to the Assessee butbased on the Circular and therefore, strict interpretation ofthe Circular has to be done. 7.Facts of the case clearly reveals that the petitioner doesnot fall under any of the Clauses 2(a) and 2(d) of the Circular,dated 26.06.2006. Therefore, the respondent was fully justifiedin not exercising his discretion and waiving the interestlevied. Thus, there is no error in the impugned order.Accordingly, the writ petition fails and dismissed. No costs. Sd/- Asst.Registrar (CS IV ) /true copy/Sub Asst. RegistrarTo 1.The Income Tax Appellate Tribunal, Madras Bench C, Chennai. 2.The Chief Commissioner of Income Tax,Chennai-VI,III Floor, Aayakar Bhawan,121, Nungambakkam High Road, Chennai-600 034. + 1 cc to Mr.A.P.Srinivas, Advocate,SR.87233+ 1 cc to Mr.J.Balachandar Advocate,SR.87294 https://hcservices.ecourts.gov.in/hcservices/