Op/27470/2001 Of P.sudhakaran v. Dy.commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 2ND JUNE 2009 / 12TH JYAISHTA 1931 OP.No. 27470 of 2001(T) ------------------------------------- PETITIONER(S): ------------------------ P. SUDHAKARANPROPRIETOR,M/S SUDHAKARA HARDWARESVARKALA BY ADV. SRI. K.M.V.PANDALAI RESPONDENT(S): --------------------------- 1. DEPUTY COMMISSIONER OF INCOME TAX CIR II, DIVISION I, THIRUVANANTHAPURAM. 2. THE COMMISSIONER OF INCOME TAX AAYAKAR BHAVAN, KAWDIAR, THIRUVANANTHAPURAM. BY ADV. SRI.P.K.RAVINDRANATHA MENON, SENIOR ADVOCATE-R2 SRI.GEORGE K. GEORGE, STANDING COUNSEL FOR IT FOR R1 SRI. JOSE JOSEPH, STANDING COUNSEL. THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 02/06/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: O.P NO.27470 OF 2001 APPENDIX PETITIONER'S EXHIBITS: Ext.P1: Order dated 19.6.1990 passed by the Income Tax officer, Ward I,Thiruvananthapuram for 88-89. Ext.P2: letter dated 06.03.1995 filed by the petitioner. Ext.P2(a): statement showing the details of tax paid. Ext.P2(b): Challan receipt for Rs.31,502 date 04.11.1999. Ext.P3: proceedings of the Deputy Commissioner of Income Tax, Circle II,Divison I, Thiruvananthapuram dated 25.10.2000. Ext.P4: petition u/s 220(2A) dated 27.11.2000 filed by the petitioner before thecommissioner of Income Tax, Thiruvananthapuram. Ext.P5: letter dated 27.11.2000 filed by the petitioner before the Deputy Commissioner of Income Tax, Thiruvananthapuram. Ext.P6: order u/s 220(2A) of the Act passed by the Commissioner of IncomeTax, Thiruvananthapuram on 29.01.2001. Ext.P7: copy of Balance Sheet as on 31[st] March 2000 dated 23.10.2000. Ext.P7(a): copy of the Balance Sheet as on 31[st] March 1999 dated 02.10.1999. PETITIONER'S EXHIBITS: NIL /True Copy/ P.A TO JUDGE. SPC C.K.ABDUL REHIM, J. --------------------------- O.P No.27470 OF 2001 ------------------------------- DATED THIS THE 2ND DAY OF JUNE, 2009 J U D G M E N T~~~~~~~~~~~ 1.The challenge in this writ petition is against Ext.P6order issued by the 2[nd] respondent, rejecting a petition filedunder S.220(2A) of the Income Tax Act, seeking waiver ofinterest due on delayed payment of tax, with respect to theassessment year 1988-89. The petitioner filed return for the saidyear declaring a total income of Rs.59,410/-. The assessmentwas completed under S.143(3) on a total income ofRs.5,51,190/-, and the petitioner conceded additional income ofRs.4,91,769/-, to make up discripancies in the credit balance inthe books of accounts. The assessment resulted in a demand ofRs.3,50,106/-, which was subsequently increased toRs.3,61,891/-. The interest charged under S.139(8) and 217were waived to the extent of 50% by the first respondent,thereby reducing the demand to Rs.3,11,502/-. The petitioner O.P No.27470 of 2001 paid the amount in various instalments. Thereafter the assessingofficer, vide proceedings dated 25.10.2000 levied interest underS.220(2) amounting to Rs.1,67,453/- which was later reduced to1,08,982/-. Ext. P4 petition was filed seeking to waive impositionof the said amount as interest leviable under S.220(2). 2.Under Section 220(2A) the assessee has to satisfy thefollowing conditions, (1).Payment of such amount has caused or would cause genuinehardship to the assessee (2). default in payment of the interest which has been paid or waspayable under the said Sub-section was due to circumstances beyond thecontrol of the assessee and (3) the assessee has cooperated in any inquiry relating to the assessmentor any proceeding for the recovery of any amount due from him. O.P No.27470 of 2001 paid the amount in various instalments. Thereafter the assessingofficer, vide proceedings dated 25.10.2000 levied interest underS.220(2) amounting to Rs.1,67,453/- which was later reduced to1,08,982/-. Ext. P4 petition was filed seeking to waive impositionof the said amount as interest leviable under S.220(2). 2.Under Section 220(2A) the assessee has to satisfy thefollowing conditions, (1).Payment of such amount has caused or would cause genuinehardship to the assessee (2). default in payment of the interest which has been paid or waspayable under the said Sub-section was due to circumstances beyond thecontrol of the assessee and (3) the assessee has cooperated in any inquiry relating to the assessmentor any proceeding for the recovery of any amount due from him. The Commissioner of Income Tax, on consideration of thepetition, observed that the assessee has co-operated with theassessment proceedings and hence the condition No.(3)mentioned above has been satisfied by him. While consideringthe condition No.(1) as to whether the payment of the amountwill cause genuine hardship to the assessee, the Commissionerobserved that the assessee had returned a total income of O.P No.27470 of 2001 Rs.3,38,650 and Rs.3,80,980/- for the assessment years 1998-99, and 1999-2000, respectively. It is found that the assesseehas got agricultural income also. Considering the fact that theinterest to be waived is Rs.1,08,982/- only, the first respondentheld that the payment of such an amount will not cause genuinehardship to the assessee . 3. The contention of learned counsel for the petitioneris that there is clear failure on the part of first respondent in notconsidering the fact that the petitioner firm has got hugeliabilities during assessment years 1998-99 and 1999-2000, asevidenced from their balance sheet, and hence the findings thatthe assessee has got sufficient income during the subsequentyears, is not factually correct. For evaluating the questionwhether condition no.(1) above has been satisfied or not, what isto be taken note of is the income of the assessee for the periodsconcerned. The fact that the assessee is having liabilities , as perthe balance sheet, is not a criteria to assess his capacity forpayment. Hence I do not find any illegality or error in the findingsof the commissioner in this respect. 4. The learned counsel urges a further contention thatthe commissioner has totally failed to consider the questionregarding condition No:(2) enumerated above. In fact, theCommissioner has narrated the history of the assessment andbackground of the default. It is mentioned that against a totalincome of Rs.5,51,170 assessed, the assessee had initiallydeclared an amount of Rs.59,410/- only. It is also evident that awaiver 50% on the interest due under S.139(8) and 217 wasallowed. Further payment of the tax amount in instalments wasallowed. From these facts alone it could not be said that thedefault occurred due to any circumstances which were beyondthe control of the assessee. However, relying on the decision ofthis court in M/s. G.T.N Textiles, 217 ITR 653, the firstrespondent found that all the three conditions are cumulativeand unless all of them are satisfied, waiver of interest could notbe allowed under Section 220(2A). Since there is a clear findingthat the condition No:1 has not been satisfied in this case, thefailure to consider condition No:(2) is not of consequence. HenceI am inclined to concur with the finding that the the assessee isnot entitled to get a waiver under S.220(2A). O.P No.27470 of 2001 O.P No.27470 of 2001 5.The learned counsel for the petitioner, Adv. K.M.VPandalai, vehemently contented that there is lack of properconsideration of the issue by the 1[st] respondent, and there is noproper evaluation of the facts and circumstances of the case,based on the requirements stipulated in the provision in order todecide whether waiver can be allowed or not. On a perusal ofExt.P6 I do not think that there is any non-application of mind ornon-advertance to the contentions. The first respondent hadproperly considered the different aspects of the issue, based onthe statutory conditions. Hence I do not find any impropriety orirregularity in Ext.P6 proceedings. 6.In the result the writ petition is devoid of merit andaccordingly dismissed. C.K.ABDUL REHIM, JUDGE.