R.kothandaram v. The Chief Commissioner Of Income Tax V

Reserved on : 02.03.2016Delivered on : 08.03.2016 IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 08.03.2016 R.Kothandaram... PetitionerVs. 1.The Chief Commissioner of Income Tax V, 121, Mahatma Gandhi Road, Chennai – 34. 2.The Assistant Commissioner of Income Tax, Business Range XV, 121, Mahatma Gandhi Road, Chennai – 34.... Respondents Petition filed under Article 226 of The Constitution ofIndia praying to issue a writ of certiorarified mandamus tocall for the orders passed by the 1[st]respondent inC.No.CC.V/24(87)/2002-2003 dated 31.03.2004 for the assessmentyears 1991-92 to 95-96 and quash the same and to direct the 1[st]respondent to waive the interest levied under Sections 234A,234B and 234C of Income Tax Act 1961. For Petitioner : Mr.Muthappan For Respondents: Mr.T.Ravikumar, Senior Standing Counsel The petitioner has filed the above Writ Petition to issuea writ of certiorarified mandamus to call for the orderspassed by the 1[st] respondent dated 31.03.2004 for theassessment years 1991-92 to 1995-96 and to quash the same andto direct the 1[st] respondent to waive the interest levied underSections 234A, 234B and 234C of Income Tax Act 1961. 2.It is the case of the petitioner that his father lateRagava Reddy, who was looking after his tax affairs under theprofessional guidance of the Chartered Accountant, had notdefaulted in filing his returns nor did he have any arrears oftax till 1991-92. According to the petitioner, there has beenno single instance of any default by him prior to 1991-92.Further according to the petitioner, he was totally dependenthttps://hcservices.ecourts.gov.in/hcservices/on his father and on the guidance of the auditor for his tax affairs. The petitioner's father died in the year 1991 and hadwritten a Will appointing R.Krishnan, Chartered Accountant asExecutor of the Will. However, the Will was not probated bythe Executor, which led to series of disputes among the familymembers in relation to the property matters. The CharteredAccountant also failed to prepare the statement of accountsand did not submit the returns for the aforesaid period.According to the petitioner, there was dispute between him andhis brother and his brother had turned against him. Due to thestrained relationship with his brother, he did not inform himabout the VDIS (Voluntary Disclosure of Income Scheme)Declaration and about the payment of the tax thereon. Thepetitioner also accepted the assessment order and paid theentire tax of Rs.9,51,202/-. Thereafter, he applied for waiverof interest before the 1[st] respondent. The 1[st] respondent leviedinterest under Sections 234A, B and C of the Act. The 1[st]respondent also rejected the application for waiver ofinterest on the ground that he was not empowered to grantwaiver. 3.The learned counsel appearing for the petitioner, insupport of his contentions, relied upon the unreportedjudgment dated 27.02.2007 made in W.P.No.19996 of 2003[M/s.N.Haridas and Co., 4/2, Mandapan Cross Road, Kilpauk,Chennai -10] wherein a Division Bench of this Court had setaside the impugned order by which the respondent Income TaxDepartment refused to grant waiver of interest. 4.The learned counsel appearing for the respondentssubmitted that under Notification F.No.400/234/95-IT(B) dated23[rd] May 1996 where a return of income could not be filed bythe assessee due to unavoidable circumstances and such returnof income is filed voluntarily by the assessee or his legalheirs without detection by the AO. The reduction or waiver ofinterest under Section 234A or Section 234B or Section 234Ccan be considered. 4.The learned counsel appearing for the respondentssubmitted that under Notification F.No.400/234/95-IT(B) dated23[rd] May 1996 where a return of income could not be filed bythe assessee due to unavoidable circumstances and such returnof income is filed voluntarily by the assessee or his legalheirs without detection by the AO. The reduction or waiver ofinterest under Section 234A or Section 234B or Section 234Ccan be considered. 5.The learned counsel for the respondents, in support ofhis contentions, relied upon the judgment reported in (2001)171 CTR 0001 [Commissioner of Income Tax Vs. AnjumM.H.Ghaswala & Ors.] wherein the Hon'ble Supreme Court heldthat interest for default in furnishing return of income,default in payment of advance tax and interest for defermentof advance tax are mandatory in nature. 6.On a perusal of the judgment relied upon by the learnedcounsel for the petitioner made in W.P.No.19996 of 2003[M/s.N.Haridas and Co., 4/2, Mandapan Cross Road, Kilpauk,Chennai -10], the Managing Partner of the petitioner Firm fellill and subsequently died and hence, the petitioner could notpay the tax as demanded. The Division Bench held that the levyof interest by the respondent, without considering theunavoidable circumstances, is erroneous. counsel for the petitioner made in W.P.No.19996 of 2003[M/s.N.Haridas and Co., 4/2, Mandapan Cross Road, Kilpauk,Chennai -10], the Managing Partner of the petitioner Firm fellill and subsequently died and hence, the petitioner could notpay the tax as demanded. The Division Bench held that the levyof interest by the respondent, without considering theunavoidable circumstances, is erroneous. https://hcservices.ecourts.gov.in/hcservices/ 7.In the case on hand, the petitioner has stated that hisaccounts were being taken care by his father, who died in theyear 1991, but the Voluntary Disclosure of Income Scheme cameinto force in the year 1997 only. Therefore, by stating thathis father was looking after the tax affairs of the petitionerand that there was strained relationship between his brother,cannot be a ground to waive the interest, which was rightlyimposed by the 2[nd] respondent. In the absence of any acceptablereason given by the petitioner, the ratio laid down by theDivision Bench of this Court cannot be applied to the factsand circumstances of the present case. In that case, theManaging Partner of the Firm fell ill and subsequently, hedied due to brain cancer and hence, the petitioner Firm couldnot pay the tax as demanded. In the case on hand, thepetitioner has thrown the blame on his father and his brotherfor not paying the tax in time. Therefore, in the absence ofany acceptable reason shown by the petitioner, the 1[st]respondent had rightly rejected the petition. The impugnedorder passed by the 1[st] respondent is just and proper. 8.In these circumstances, I do not find any reason tointerfere with the order passed by the 1[st] respondent. The WritPetition is devoid of merits and is liable to be dismissed.Accordingly, the Writ Petition is dismissed. No costs. Sd/- Assistant Registrar(CO) //True Copy// Sub Assistant Registrar vaTo 1.The Chief Commissioner of Income Tax V, 121, Mahatma Gandhi Road, Chennai – 34. 2.The Assistant Commissioner of Income Tax, Business Range XV, 121, Mahatma Gandhi Road, Chennai – 34. +1cc to Mr.M. Muthappan, Advocate, S.R.No.14564 +1cc to Mr.T. Ravikumr, Advocate, S.R.No.14620 KGK(CO)EU(17/03/2016) https://hcservices.ecourts.gov.in/hcservices/