Ext.p3 For Rejecting The Claim Of The v. The Chief Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN WEDNESDAY, THE 28TH SEPTEMBER 2011 / 6TH ASWINA 1933 WP(C).No. 1465 of 2006(Y) ------------------------- PETITIONER(S): --------------- M/S.RAJESWARI HOSPITAL, TALAP, KANNUR REPRESENTED BY DR.V.P.DEVADAS, PARTNER. BY ADV. SRI.T.M.SREEDHARAN RESPONDENT(S): --------------- 1. THE CHIEF COMMISSIONER OF INCOME TAX CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, COCHIN-682 018. 2. THE INCOME TAX OFFICER, WARD-2(2), KANNUR. ADV. SRI.JOSE JOSEPH, THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 28/09/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).No. 1465/2006 APPENDIX PETITIONER(S)' EXHIBITS P1.COPY OF THE ORDER DTD.25.1.2000 PASSED BY THE INCOME TAX OFFICER,SPECIAL WARD, CANNANORE. P2.COPY OF THE APPLICATION FOR WAIVER OF INTEREST DTD.4.12.2002. P3.COPY OF THE ORDER DTD.23.6.2005. sdk+ ///True copy/// P.A. to Judge ================== W.P.(C).No. 1465 of 2006 ================== Dated this the 28[th] day of September, 2011 In respect of assessment year 1996-97 the petitioner filed areturn under the Income Tax Act. Assessment was completed and thepetitioner was directed to pay assessed tax with interest, underSections 234A, 234B and 234C of the Income Tax Act by Ext.P1 order,amounting to ` 34,467/-. The petitioner submitted an application forwaiver of interest in accordance with the Government orders on thesubject. The same was rejected by Ext.P3 order. The petitionerchallenges the same on the ground that the petitioner has satisfied theconditions for wavier of interest and, therefore, the rejection of theclaim for waiver of interest is unsustainable. 2.The learned standing counsel for the Income TaxDepartment supports Ext.P3 order on the same reasons mentioned inExt.P3. 3.I have considered the rival contentions in detail. 4.The reasons stated in Ext.P3 for rejecting the claim of the petitioner are contained in paragraphs 9 and 10 of Ext.P3, which readthus: “9.The assessee's contention in the waiver petition is thatits case is covered by clauses (d) and (e) of para 2 of the Board'snotification dated 23.5.1996. For invoking clause (d) the assesseestates that the building tax claimed by the assessee as a deductionits case is covered by clauses (d) and (e) of para 2 of the Board'snotification dated 23.5.1996. For invoking clause (d) the assesseestates that the building tax claimed by the assessee as a deduction w.p.c.1465/06 was allowable u/s 30 and it was only because of the subsequentdecision of the High Court reported in 225 ITR 786 that it wasdisallowed. The contention of the assessee is not correct. Clause (d) ofpara 2 refers to a situation where an income is treated as non-taxablebecause of a decision of the jurisdictional High Court and hence is nottaken into account for the purpose of payment of advance tax.Subsequently as a result of a retrospective amendment of law or adecision of the Supreme Court such income become taxable with theresult the advance tax paid falls short of the advance tax payable. Inthe assessee's case there is no question of any income being treated asnon taxable on the basis of any jurisdictional High Court's decisionwhile estimating the advance tax liability. Further the decision of theKerala High Court in the case of Micheal Joseph & Co. Vs. CIT 225 ITR786 was reported as early as on 4.7.1996 holding that building tax isnot deductible either u/s 30 or section 37. When the assessee filed thereturn in September 1997 the legal position was that building tax wasnot allowable as a deduction but the assessee still claimed it in thereturn as a deduction. For these reasons clause (d) of para 2 of theBoard's notification does not apply. 10.The second contention of the assessee is that the delayin filing the return was due to unavoidable circumstances and thereturn was filed voluntarily and hence clause (e) of para 2 will apply. Itis submitted that the return for the assessment year 1996-97 was thefirst return of the assessee and there were several problems faced bythe assessee at the commencement of the business like severalobjections raised by the local authorities, illness of one of the partnersand engagement of outside persons to look after the accounting workand all these factors combined together caused the delay in filing thereturn. The assessee also refers to the decision of the Gujarat HighCourt reported in 269 ITR 167 to the effect that interest levied u/s234B and 234C can also be waived in a case covered by clause (e) ofpara 2 of the Board's notification. The assessee has made certaingeneral statements like objections raised by the local authorities,illness of one of the partners, engagement of outside persons to lookafter the accounting matters etc. to argue that the delay in filing thereturn was due to unavoidable circumstance. However, he has notproduced any evidence to substantiate these contentions. Moreover, Ifind from the records that the audit report u/s 44AB for the relevantperiod was prepared and signed on 30.10.1996 itself. In other wordsthe accounts of the assessee were finalised much before the due datefor filing the return for the assessment year 1996-97. Hence theassessee cannot say that the delay in filing the return was due tounavoidable circumstances. Under these circumstances the assessee'sargument that its case is covered by clause (e) of para 2 of the Board'snotification dated 23.5.1996 is totally incorrect.” The petitioner does not dispute the facts that the decision of the Kerala High Court is dated 4.7.1996 and the petitioner submitted return in w.p.c.1465/06 September 1997. That being so, I do not think that the petitionersatisfied clause (d) of the relevant notification issued by the CentralBoard of Direct Taxes. In respect of clause (c) of the notification also, Ido not find any infirmity in the reasons in Ext.P3 order. Therefore, I donot find any grounds for the petitioner to challenge Ext.P3 order.Accordingly, the writ petition is dismissed. sdk+ Sd/- S.SIRI JAGAN, JUDGE ///True copy/// P.A. to Judge