The Petitioner Sought For Waiver Of Interest Before Therespondent, By Relying Upon The Decisions Of I) Hon'ble Kerala Highcourt, In The Case Of Commissioner Of v. Thressiammaabraham Reported In [(1997) 227 Itr 0802] And Ii) Hon'ble Highcourt Of Andra Pradesh, In The Case Of Commissioner Of Income Taxvs. Attili Narayana Ra

M/s.Narayanan Chettiar Industries,No.14, Davidson Street,Rep.by its Managing Partner,Chennai 600 001....PetitionerVs.The Chief Commissioner of Income Tax,Chennai – IV,Chennai 600 034....Respondent Writ Petition, filed under Article 226 of the Constitution ofIndia, for issuance of Writ of Certiorarified Mandamus, callingfor the records of the petitioner on the file of the respondent inC.No.4005(159) CCIT-IV/2006-07 and quash the impugned order dated15.02.2007 relating to the petitioner for the assessment year 1990-91 and direct the respondent to waive interest u/s.234A, 234B, 234Cand 220(2) of the Income Tax Act,1961. Heard Mr.Venkat Narayanan, the learned counsel appearing forM/s.Subbaraya Aiyar Padmanabhan and Ramamani, the learned counselfor the petitioner and Mr.Naveendurai Babu, the learned JuniorStanding Counsel for the respondent. 2.The petitioner has impugned the order passed by therespondent, dated 15.02.2007, under Sections 234A, 234B & 234Cread with 119(2) (a) and Section 220(2A) of the Income Tax Act,1961 (hereinafter, referred to as 'the Act'). 3. The petitioner's case is that, they had mortgaged aproperty to secure the loan transactions availed by their sisterconcern. On account of the default committed, the propertymortgaged by the petitioner was proceeded against and sold, and thehttps://hcservices.ecourts.gov.in/hcservices/sale proceed was appropriated towards the discharge of the loan availed by the sister concern. 4.The question that falls for consideration in this WritPetition, is as to whether the petitioner is liable for capitalgains. 5.The petitioner sought for waiver of interest before therespondent, by relying upon the decisions of i) Hon'ble Kerala HighCourt, in the case of Commissioner of Income Tax Vs. ThressiammaAbraham reported in [(1997) 227 ITR 0802] and ii) Hon'ble HighCourt of Andra Pradesh, in the case of Commissioner of Income TaxVs. Attili Narayana Rao reported in [(1998) 223 ITR 0010]. 6. By relying upon the afore mentioned decisions, it wascontended that, when the sale consideration has been directlycredited to the Bank or Financial Agency, no capital gains werecredit to the assessee. Further, it was submitted that, thedecision rendered by the High Court of Andra Pradhesh, in V.AttiliNarayana Rao's case (supra) was reversed by the Hon'ble SupremeCourt only in the year 2001, in the case of Commercial Income TaxV. Attili N.Rao, reported in [(2001) 252 ITR 0880] and what wouldbe the relevant law, which hold the field as on the date of filingthe Petition, is the law laid down in the decisions rendered in thecases of Smt.Thressiamma Abraham (supra) Vs. Attili Narayanan Rao(supra). 7. The Revenue, on the other hand, would contend that therespondent has rightly rejected the petitioner's application forwaiver of interest under Sections 234A, 234B and 234C of the Act aswell as Section 220 (2) of the Act, as the petitioner's case doesnot fall under any of the parameters, as mentioned in the Circularof Central Board of Direct Taxes (CBDT), dated 26.06.2006. 8. In reply, the learned counsel appearing for the petitionerwould contend that, after the impugned order was passed, it came tothe notice of petitioner/assessee that the Authority has proceededon the basis that the Appeal related only to quantification ofcapital gains on sale of agricultural lands and not the claim that,it was not liable to capital gains, in view of the entire saleproceeds being appropriated by the Bankers towards their dues. 8. In reply, the learned counsel appearing for the petitionerwould contend that, after the impugned order was passed, it came tothe notice of petitioner/assessee that the Authority has proceededon the basis that the Appeal related only to quantification ofcapital gains on sale of agricultural lands and not the claim that,it was not liable to capital gains, in view of the entire saleproceeds being appropriated by the Bankers towards their dues. 9. Thus, according to the petitioner/assessee, there was amistake apparent from the record, and therefore, the petitioner hasrequested for rectifying the mistake crept in the impugned order,by filing a Petition, dated 07.04.2007 under Section 154 of theAct, which is said to have been filed through the petitioner'sauthorized representative on 08.04.2007. Therefore, it is submittedthat the petitioner should be permitted to go before the respondentand argue the Petition filed under Section 154 of the Act. Inaddition to the above submission, it is submitted that, so far aswaiver of interest under Section 220(2) of the Act is concerned,the respondent has not given any reasons, as to how, the petitionerhas not satisfied the condition laid down under Section 220 (2A) ofthe Act. https://hcservices.ecourts.gov.in/hcservices/ 10. Further, it is submitted that the respondent is boundto record the reasons, as to why, he is not satisfied that thewaiver cannot be granted. In support of such contention, thelearned counsel appearing for the petitioner placed reliance uponthe decision of this Court, in the case of Mani Vs. Commissioner ofIncome Tax, reported in [(2010) 231 CTR 0453], wherein, it ispointed out that, the respondent is bound to record reasons whilepassing an order, since the power exercised by the respondent is aquasi judicial power. 11. A perusal of the impugned order does not reveal anycogent reason for rejecting the request of the petitioner. Therespondent is bound to consider the Petition, as to whether thepetitioner fulfilled all the three conditions laid down underSection 220 (2A) and record reasons, as to how, the petitioner isnot entitled to the waiver of penal interest. 12. The learned Junior Standing Counsel for the Revenuepointed out that, the Rectification Petition is said to have beenpresented wayback in the year 2007, and by now, it would havebeen disposed of. Whereas, the learned counsel appearing for thepetitioner, on instructions, submitted that the Petition is yet tobe disposed of, and the same is pending before the respondent. 13.Thus, considering the fact that Petition forrectification is pending, and this Court, being satisfied that therespondent has not recorded any reasons, as to why, the petitioneris not entitled to waiver of interest, levied under Section 220(2A), the matter requires to be re-considered by the respondentafresh. 14.Thus, for the above reasons, this Writ Petition isallowed, the impugned order is set aside and the matter isremanded to the respondent for fresh consideration, who shall takeinto consideration the Petition filed by the petitioner forrectification under Section 154 of the Act and permit thepetitioner to canvass all the points before him and take a freshdecision in the matter, in accordance with law. Since it isrepresented that, the petitioner's Application under Section 154 ofthe Act, filed on 08.04.2007, if not available on files of therespondent, the petitioner at liberty to furnish true copy of thesame, which shall be taken into consideration. No costs.Consequently, connected Miscellaneous Petition is closed. Sd/- ASST. REGISTRAR /TRUE COPY/ dna/sd https://hcservices.ecourts.gov.in/hcservices/ SUB ASST. REGISTRAR To The Chief Commissioner of Income TaxChennai – IV,Chennai 600 034. +1 cc to Mr.Subbaraya Iyer, Advocate SR.NO. 551 +1 cc to Mrs.Hema Murali Krishnan, Advocate SR.NO. 405 Writ Petition No. 30776 of 2007 MG(CO) JK 07/02/18