Wp(C)/14634/2008 Of K.c.mohanan v. The Chief Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC TUESDAY, THE 1ST DAY OF JANUARY 2013/11TH POUSHA 1934 WP(C).No. 14634 of 2008 (P) --------------------------- PETITIONER(S):------------- K.C.MOHANAN,ANUGRAHA, P.O.PALAYAD NADA, IRINGAL (VIA), VADAKARA KOZHIKODE DISTRICT. BY ADVS.SRI.T.M.SREEDHARAN SRI.V.P.NARAYANAN RESPONDENT(S): -------------- 1. THE CHIEF COMMISSIONER OF INCOME TAX, C.R.BUILDING, I.S.PRESS ROAD, KOCHI. 2. THE INCOME TAX OFFICER, WARD 2 (2), KOZHIKODE. 3. THE TAX RECOVERY OFFICER RANGE II, KOZHIKODE. BY SRI.GEORGE K. GEORGE, SC FOR IT THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01-01-2013 ALONG WITH WPC NO.15054/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 14634 of 2008 APPENDIX PETITIONER'S EXHIBITS: RESPONDENT'S EXHIBITS: NIL /TRUE COPY/ VPV P.A. TO JUDGE ANTONY DOMINIC, J. ==================== W.P.C. NoS. 14634 of 2008 &15054 of 2008 ====================Dated this the 1[st] day of January 2013 JUDGMENT The parties to these writ petitions and the issuesraised are common and therefore these writ petitions wereheard and are disposed of by the common judgment. 2. In so far W.P.(C) No. 1463/2008 is concerned, petitioner challenges Ext.P9 order passed by the firstrespondent rejecting his application made under Section 220(2A) for waiver of interest levied under Section 220 (2) of theIncome Tax Act. A reading of Ext.P9 order shows that onappreciation of the contentions raised and the materialsavailable, the first respondent concluded that the petitionerdid not satisfy the three conditions specified in Section 220(2A) of the Income Tax Act for granting waiver of interest.The question raised in this writ petition is whether the saidfinding of the first respondent is legally tenable. 3. It is the settled position of law that the three conditions specified in Section 220 (2A) of the Income Tax Actshould be cumulatively satisfied by an assessee to claimwaiver of interest levied under Section 220 (2) of the Act. These conditions are :- (i) That the payment of such amount of interest hascaused or would cause genuine hardship to theassessee.caused or would cause genuine hardship to theassessee. ii) That default in the payment of the amount onwhich interest is payable was due tocircumstances beyond the control of theassessee andwhich interest is payable was due tocircumstances beyond the control of theassessee and iii) That the assessee has co-operate in an enquiryrelating the assessment or proceedings forrecovery of any amount due from him. relating the assessment or proceedings forrecovery of any amount due from him. 4. As a result of the requirement that all the three conditions should be satisfied by the assessee to claim thebenefit of waiver, if it is found that anyone of the conditionshave not satisfied the claim of the assessee has to fail. 5. In so far as this case is concerned, reading ofthe impugned order shows that the first respondent hasspecifically found that this is not a case where the assesseehad established that payment of interest would cause genuinehardship to him. This conclusion is on the basis that theassessee is a partner in two firms doing business in liquor andalso in a firm running a theatre. It is also found thatasseessee has substantial agricultural income and that he 4. As a result of the requirement that all the three conditions should be satisfied by the assessee to claim thebenefit of waiver, if it is found that anyone of the conditionshave not satisfied the claim of the assessee has to fail. 5. In so far as this case is concerned, reading ofthe impugned order shows that the first respondent hasspecifically found that this is not a case where the assesseehad established that payment of interest would cause genuinehardship to him. This conclusion is on the basis that theassessee is a partner in two firms doing business in liquor andalso in a firm running a theatre. It is also found thatasseessee has substantial agricultural income and that he owns 5.22 acres of coconut garden and 1.10 acres of cashewplantation. These facts found by the first respondent inExt.P9 order are not even contended to be incorrect. If thatbe so, on the materials available before this court, I amunable to infer that the payment of interest by the assesseewould cause any genuine hardship justifying invocation ofpower under Section 220 (2A) of the Act. Consequently,Ext.P9 order challenged in W.P.(C) No. 14634/08 has to beupheld. 6. This view taken by me is fortified by the factthat levy of interest under Section 220 (2) is for delay inpayment of tax for the periods subsequent to completion ofassessment. One of the contention raised by the assesseethat non-payment was due to circumstances beyond hiscontrol is that the assessment was necessitated on account ofaddition of taxable income of the firm of which he is apartner. This reason may justify delay in filing the returns butnot delay in the payment of tax for the post assessmentperiod. If that be so, the second requirement of Section 220(2A) of existence of circumstances beyond the control of theassessee is also established. -4- 7. In so far as W.P.(C) No. 15054/08 is concerned, the challenge in the writ petition is against Ext.P4, an order bywhich in the claim of the assessee, waiver of interest leviedunder Sections 234 A and 234 B of the Act is only partiallyallowed. 8. In so far as W.P.(C) No. 10504/08 isconcerned, the petitioner challenges Ext.P4 order where hesought waiver of interest levied under Sections 234 (A) and234 B of the Income Tax Act. Interest under Sections 234 A& B could be waived by the first respondent, only if theconditions specified in the notification F.No. 400/29/2002-IT(B) dated 26[th] of June 2006 are satisfied. The first conditionrequires seizure of documents in search and seizureoperations and the second condition is applicable only whereinterest is charged under Section 234(c). Third condition isapplicable only in case where statute has been amendedretrospectively and the fourth condition is applicable onlywhere return is filed voluntarily. In so far as this case isconcerned none of these grounds are applicable and in spite ofit, the order shows 1/3[rd] of the interest has been waived up tothe assessment year 1992-93. Since conditions specified in -5- the notification are not available, the petitioner cannot seek waiver of interest levied under Section 234 A and Section 234 B. Therefore, Ext.P9 order has to be sustained. In the result, the writ petition has no merit andalso rejected. kvr/ /True copy/ Sd/- ANTONY DOMINIC JUDGE P.A. to Judge