Wp(C)/110/2007 Of R.m.jayadevan v. The Deputy Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON WEDNESDAY, THE 27TH DAY OF JUNE 2012/6TH ASHADHA 1934 WP(C).No. 110 of 2007 (K) ------------------------- PETITIONER(S) : --------------------- R.M.JAYADEVAN,M/S.PREMIER AUTO SERIVICE, EAST NADAKKAVU, CALICUT. BY ADVS.SRI.T.M.SREEDHARAN SRI.V.P.NARAYANAN RESPONDENT(S) :------------------------ 1. THE DEPUTY COMMISSIONER OF INCOME TAX,INVESTIGATION CIRCLE I, CALICUT.2. THE CHIEF COMMISSIONER OF INCOME TAX,C.R.BUILDING, I.S.PRESS ROAD, KOCHI - 18. 3. THE JOINT COMMISSIONER OF INCOME TAX,CALICUT RANGE, CALICUT. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAXBY SRI.GEORGE K. GEORGE, SC FOR IT THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 27-06-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: AMV WP(C).No. 110 of 2007 (K) APPENDIX /TRUE COPY/ P.A.TO JUDGE P.R.RAMACHANDRA MENON,J. --------------------------------------- W.P. (C) NO. 110 of 2007 (K) ---------------------------------------- Dated this the 27[th] day of June, 2012 JUDGMENT The rejection of the claim for waiver of interest under Section 234A, 234B & 234C, by passing Ext.P4 order, whilegranting the benefit to the counterpart of the petitioner who hadpursued the deal acting hand-in-hand with the petitioner videExt.P6, is the subject matter of challenge in this writ petition. 2.The petitioner is claiming for the benefit of the Circularbearing F.No.400/234/95-IT(B) dated 23.05.1996, which hasbeen issued in exercise of the power conferred under Section 119(2)(a) of the Income Tax Act. The case of the petitioner is that,in respect of the assessment year 1995 -96, return was filed,declaring a total income of Rs.66,540/- (Rupees Sixty sixthousand five hundred and forty only), as borne by Ext.P1showing the tax paid under Section 140A as Rs.9,312/- (RupeesNine thousand three hundred and twelve only). However, Ext.P2assessment order came to be passed on 29.03.2000, relying onsome property deal pursued by the petitioner in association withone K.P.Ahamed Kutty, Timber Merchant at Calicut. The income generated from the said deal to an extent of 3/10 was attributedto the petitioner; while the remaining 7/10 was fixed againstMr.K.P.Ahamed Kutty. Petitioner filed in Ext.P3 petition forwaiving of interest under Section 234A, 234B & 234C on28.09.2000; but more than 'six years' after filing the same, it hasbeen simply rejected as per Ext.P4 order dated 02.11.2006,holding that the petitioner does not satisfy the condition forwaiver/redemption of interest as per the Board's instructions inthe Circular F.No.400.29/2002-IT(B) dated 26.06.2006; which inturn is under challenge. 3.Mr.T.M.Sreedharan, the learned senior counselappearing for the petitioner submits, with reference to the Ext.P6order passed by another officer holding the same office, that inthe case of similar petition for waiver of interest preferred byMr.K.P.Ahamed Kutty, whose name is referred to in Ext.P2assessment order and in respect of whom the capital gain to anextent of 7/10[th] share was taken for the assessment year 1995-96, relief was granted, observing that sustainable case has been 3.Mr.T.M.Sreedharan, the learned senior counselappearing for the petitioner submits, with reference to the Ext.P6order passed by another officer holding the same office, that inthe case of similar petition for waiver of interest preferred byMr.K.P.Ahamed Kutty, whose name is referred to in Ext.P2assessment order and in respect of whom the capital gain to anextent of 7/10[th] share was taken for the assessment year 1995-96, relief was granted, observing that sustainable case has been made out, whereas such benefit sought for by the petitioner byfiling Ext.P3 petition much earlier stands declined after six years,which is cited as arbitrary and an instance of discrimination aswell. The learned counsel submits that Ext.P4 order is not at all a'speaking order' and that the reliance placed on the Circulardated 26.06.2006 is not correct or sustainable. The stand takenby the respondents in paragraph 7 of the statement is sought tobe assailed, pointing out that, the only reason for extending thebenefit to Mr.K.P.Ahamed Kutty, vide Ext.P6, is apparently basedon the earlier Circular, which is stated as super-ceded, by theCircular dated 26.06.2006. It is pointed out by the Learnedcounsel that, absolutely no distinction/difference is there betweenthese two Circulars, but for the fact that Sub clause (e) toClause 2 of 1996 Circular came to be incorporated as Sub clause(d) to clause 2 of 2006 Circular and that's all. 4.Sri.Jose Joseph, the learned standing counselappearing for the respondents submits that the idea andunderstanding of the petitioner as to the eligibility to have waiver of interest under Section 234A, 234B & 234C and reliancesought to be placed on the previous Circular is wrong andmisconceived. It is sated that, even going by the Circular soughtto be relied on the petitioner that is Circular dated 23.05.1996,Sub clause (a) to (d) under clause 2 deal with a differentsituation. It is pointed out that, Sub clause (a) deals withSection 234A, while Sub clause (b) deals with an instance underSection 234B. Sub clause (c) is in relation to 234C, while Subclause (d) specifically refers to a situation covered by 234B &234C. The learned standing counsel submits that Sub clause (e)is only a 'residual clause' and according to the revenue, itpertains only to a circumstances covered by Section 234A.Reliance is sought to be placed on the decision rendered by theDivision Bench of this Court in Chief Commissioner of IncomeTax & Anr. Vs.Jimmichan M. Varicatt [(2011) 330 ITR 338(Ker)]. Reference is also made to a decision rendered by thisCourt in W.P.(C) No.12494 of 2004(K). The Learned counselfurther submits that, merely for the reason that some benefit has been extended to Mr.K.P.Ahamed Kutty, vide Ext.P6, if it is wrong and unsustainable, it cannot set a good precedent to be cited byothers for extending similar benefit, in perpetuation of themistake. 5.This Court is well aware of the position that, if anybenefit has been given to somebody by virtue of a mistake, it isnot liable to be perpetuated by issuing a writ of mandamus. Thelaw in this regard has been made clear by the Apex Court onmany an occasion including in Chandigarh Administration andanother vs. Jagjit Singh and another respondent reportedin 1995 AIR Supreme Court 705 and so also in GursharanSingh and Others vs. New Delhi Municipal Committee andothers in (1996) 2 SCC 459. The question to be consideredis, whether the correct legal and factual position has beenconsidered by the concerned authority or not. 6.In the statement filed by the respondents it iscontended in paragraph 7, that the benefit conferred toMr.K.P.Ahamed Kutty, vide Ext.P6 is on the basis of the earlier 6.In the statement filed by the respondents it iscontended in paragraph 7, that the benefit conferred toMr.K.P.Ahamed Kutty, vide Ext.P6 is on the basis of the earlier Circular, i.e., Circular dated 23.05.1996, which came to be super-ceded by the time Ext.P4 order was passed in the case of thepetitioner. Since no substantial difference is brought to thenotice of this Court between these two Circulars, this is a matterwhich requires to be considered by the second respondent, moreso, when 7/10[th] of the capital gains in respect of the assessmentyear 1995-96, stand attributed to Mr.K.P.Ahamed Kutty,whilethe petitioner remains to be mulcted with the residual extent of3/10[th] alone. That apart, the claim for waiver was submitted bythe petitioner vide Ext.P3, much before the claim petitionpreferred by Mr.K.P.Ahamed Kutty, whose case came to beconsidered first, passing favourable orders vide Ext.P6, while thecase of the petitioner came to be kept in the cold storage fornearly six years, finally leading to Ext.P4. In any view of thematter, there is no much discussion in Ext.P4 with regard to thefacts and figures and the relevant provisions of law, and also withregard to the benefit extended to the counterpart of thepetitioner vide Ext.P6. 7.In the above circumstances, Ext.P4 is set aside and the matter is remitted to the second respondent for freshconsideration and to pass appropriate orders in accordance withlaw, as expeditiously as possible, at any rate within three monthsfrom the date of receipt of a copy of the judgment. The writ petition is disposed of. Sd/- P.R.RAMACHANDRA MENON,JUDGE AMV