Dinesh Sharma v. Chief Commissioner Of Income Tax

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. C.W.P. No.259 of 2010Date of decision: 12.1.2010 Dinesh Sharma. Vs. Chief Commissioner of Income Tax. -----Petitioner. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE ALOK SINGH Present:-Ms. Radhika Suri, Advocatefor the petitioner. --- ORDER: 1. This petition seeks quashing of order dated18.12.2009, Annexure P-1, passed by the Chief Commissioner ofIncome Tax, rejecting application for waiver of interest underSection 158 BFA1(a) of the Income Tax Act, 1961 (for short, “theAct”) for the assessment years covering assessing years 1988-99. 2. After a search was carried out at the premises of theassessee on 20.11.1997, notice under Section 158BC of the Actwas issued, requiring the assessee to file return. Accordingly,return dated 27.8.1999 was filed after expiry of the statutoryperiod. Block assessment was completed and undisclosed income was assessed. The assessee approached the SettlementCommission. The Commission disposed of the matter underSection 245 D(4) of the Act on 12.12.2003. As regards interest, itwas held that the assessee will be liable to pay interest underSection 158BFA(1)(a) of the Act. The assessee filed anapplication for waiver of interest before the Chief Commissionerof Income Tax relying upon circular issued by the CBDT dated6.1.2003. The Chief Commissioner dismissed the application byholding that in view of provisions of Section 245-I, the order of theCommission could not be amended and the Chief Commissionercould not waive interest contrary to the decision of theCommission that the assessee was liable to pay interest. 3. We have heard learned counsel for the petitioner. 4. Main contention put forward by learned counsel is thatwaiver of interest does not amount to modification of the decisionof the Commission. Power of waiver is available only with theChief Commissioner and is exercised after liability to pay interesthas been crystalised. Reliance has been placed on judgment ofGujarat High Court inSmt. Kherunissa Allibhaiv.Commissioner of Income-Tax[1978] 113 ITR 443 whereindealing with provisions of Section 273A of the Act for waiver ofpenalty, it was observed that even if liability to pay was notdisputed, the waiver was permissible. Similar observations havebeen made in the judgment of Bombay High Court in B.R.Sound-N-Music v. O.P. Bhardwaj and another [1988] 173 ITR 433. Reliance has also been placed on judgment of the Hon’bleSupreme Court in Commissioner of Income-Tax v. AnjumM.H.Ghaswala and others[2001] 252 ITR 1, wherein it wasobserved that provision for waiver could be available to theassessee who has approached the Settlement Commission, forwhich purpose the Settlement Commission could exercise powerof an income tax authority under the Act though the Commissionwas not otherwise subordinate to the Board. 5. We are unable to accept the submissions. Theworking of the Commission under the scheme of law is suigeneris and is not at par with the assessing authorities. Eventhough after the liability to pay interest is crystalised, it may bepermissible to waive interest in accordance with the circular by anincome tax authority, the said power cannot be exercised by anyother authority in respect of the matter dealt with by aCommission, particularly when the Commission expressly directslevy of interest. Even if the Commission may be able to waive ofthe interest, if so provided under a particular circular, such powercannot be exercised by any other authority in the matter dealt withby the Commission. We, thus, do not find any infirmity with theview taken by the Chief Commissioner in rejecting the applicationof the assessee. 6. Learned counsel for the petitioner, however, arguedthat the petitioner could approach the Commission itself for therelief. 6. Learned counsel for the petitioner, however, arguedthat the petitioner could approach the Commission itself for therelief. 7. We do not express any opinion in this regard. If thepetitioner has any such legal right to approach the Commission, itcan take such remedy in accordance with law. 8. The petition is disposed of. (ADARSH KUMAR GOEL) JUDGE January 12, 2010ashwani ( ALOK SINGH ) JUDGE