Wp(C)/31380/2007 Of Sri. Sebastian Kottoor v. The Chief Commr. Of Income Tax, Cochin

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON WEDNESDAY, THE 3RD AUGUST 2011 / 12TH SRAVANA 1933 WP(C).No. 31380 of 2007(I) -------------------------- PETITIONER: --------------- MR. SEBASTIAN KOTTOOR, PROPRIETOR, KOTTOOR DRESSES, M.G.ROAD, ERNAKULAM. BY ADV. MR. P.BALAKRISHNAN (E) RESPONDENTS: --------------- 1. THE CHIEF COMMISSIONER OF INCOMETAX, COCHIN. 2. THE INCOMETAX OFFICER, WARD 2(1) RANGE 2, ERNAKULAM. R1 AND R2 BY ADV. MR. P.K.R.MENON,SR.COUNSEL,GOI(TAXES) MR. GEORGE K. GEORGE, SC FOR IT THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03/08/2011, THECOURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) 31380 OF 2007 APPENDIX PETITIONER'S EXHIBITS : EXT. P1: TRUE COPY OF ASSESSMENT ORDER DATED 21.03.2006 FOR 1998 - 991998 - 99 EXT. P2: TRUE COPY OF ASSESSMENT ORDER DATED 21.03.2006 FOR1999 - 001999 - 00 EXT. P3: TRUE COPY OF ASSESSMENT ORDER DATED 21.03.2006 FOR2000 - 012000 - 01 EXT. P4: TRUE COPY OF ASSESSMENT ORDER DATED 21.03.2006 F0R2001 - 022001 - 02 EXT. P5: TRUE COPY OF THE PETITION DATED 17.05.2006 ADDRESSEDTO THE 1ST RESPONDENT FOR WAIVER OF INTERESTTO THE 1ST RESPONDENT FOR WAIVER OF INTEREST EXT. P6: TRUE COPY OF THE PETITIONER DATED 17.05.2006 ADDRESSEDTO THE 1ST RESPONDENT FOR WAIVER OF INTEREST.TO THE 1ST RESPONDENT FOR WAIVER OF INTEREST. EXT. P7: TRUE COPY OF THE PETITION DATED 17.05.2006 ADDRESSEDTO THE FIRST RESPONDENT FOR WAIVER OF INTEREST UNDERSECTION 234A & B FOR ASSESSMENT YEAR 1999 - 00TO THE FIRST RESPONDENT FOR WAIVER OF INTEREST UNDERSECTION 234A & B FOR ASSESSMENT YEAR 1999 - 00 EXT. P8: TRUE COPY OF PETITION DATED 17.05.2006 ADDRESSED TO THE 1ST RESPONDENT FOR WAIVER OF INTEREST UNDER SECTION 234 A & B FOR THE ASSESSMENT YEAR 2001 - '02THE 1ST RESPONDENT FOR WAIVER OF INTEREST UNDER SECTION 234 A & B FOR THE ASSESSMENT YEAR 2001 - '02 EXT. P9: TRUE COPY OF ORDER DATED 18.09.2007 IN CCIT/CHN/WA/C-1/2006-07 OF THE 1ST RESPONDENT. 2006-07 OF THE 1ST RESPONDENT. /TRUE COPY/ P.A. TO JUDGE P.R. RAMACHANDRA MENON J.~~~~~~~~~~~~~~~~~~~~~~~ W.P (C) No. 31380 of 2007~~~~~~~~~~~~~~~~~~~~~~~Dated, this the 3[rd] August , 2011 JUDGMENT The petitioner is challenging the correctness and sustainabilityof Ext. P9 order passed by the Chief Commissioner of Income Tax,Cochin, who is the first respondent herein, declining the relief soughtfor to waive the interest payable under Sections 234 A & B of theIncome Tax Act in respect of the income generated by the petitionerpursuant to the land acquisition proceedings. 2. The sequence of events as narrated in the Writ Petition is asfollows : An extent of 70.02 Ares of agricultural land belonging to thepetitioner was acquired way back in October 1990, on the basis of therequisition made by the Indian Oil Corporation. Compensation wasawarded for the acquisition, as provided under the relevant provisionsof the Land Acquisition Act. It is seen from the materials on record, thatthe quantum of compensation so awarded was challenged by thepetitioner in appropriate proceedings and finally, this Court orderedenhancement. The enhanced compensation as aforesaid, includingthe interest as provided under the relevant provisions of law wassatisfied by the acquisitioning authority. On receipt of compensationand interest as above, the petitioner filed necessary returns before the Income Tax authority. The petitioner also filed Exts. P5 to P8 petitionsfor waiver of interest levied under Sections 234 A & B in respect of theassessment years 1998 - '99 to 2001 - '02. The matter was consideredby the first respondent, who passed Ext. P9 order, partly allowing therelief sought for, whereby only 75 % of the interest payable waswaived, leaving the balance 25 %, which forms the subject matter ofchallenge in this writ petition. Income Tax authority. The petitioner also filed Exts. P5 to P8 petitionsfor waiver of interest levied under Sections 234 A & B in respect of theassessment years 1998 - '99 to 2001 - '02. The matter was consideredby the first respondent, who passed Ext. P9 order, partly allowing therelief sought for, whereby only 75 % of the interest payable waswaived, leaving the balance 25 %, which forms the subject matter ofchallenge in this writ petition. 3. The learned counsel for the petitioner submits that theimpugned order has been passed by the first respondent without properapplication of mind. Eventhough the liability to satisfy the interestunder Sections 234 A & B is mandatory, there is a provision for waivingthe interest and the petitioner is sought to avail the said benefit, moreso when there was no lapse or delay on the part of the petitioner, whofiled the return, immediately on getting the enhancement awarded. Inthe said circumstances, the petitioner contends that he could not havebeen mulcted with the liability to satisfy interest. It is also contendedthat, by virtue of Section 147 of the Income Tax Act , the assessment, ifat all could have been made, it should have confined to a period of sixyears, but on going by the materials on record, the assessment asabove has transgressed in to the forbidden field as well. 4. The learned standing counsel appearing for the respondentssubmits that the idea and understanding of the petitioner is quite wrongand misconceived. The liability to satisfy the 'Interest' under the statuteis mandatory. With regard to the benefit sought to be extended(referring to the notification issued by the CBDT), it is submitted that,the first respondent has passed Ext. P9 order only after taking note ofthe totality of the circumstances. The challenge raised by the petitioner,is stated as not sustainable, since the law has been declared in crystalclear terms as per the decision reported in224 ITR 418 (Smt. HarbansKaur Vs. Commissioner of Wealth Tax) 5. The learned counsel for the petitioner submits that the case ofthe petitioner does not fall within the purview of Clause (b) of the'second paragraph' of the notification. The learned counsel furthersubmits that the concerned respondent is well vested with the power tohave extended the benefit, by delegation effected by the CBDT as pernotification 26.06.2006. It is also not a disputed fact that the CBDT isvested with the power under Section 172 of the Act to grant relief oninterest as per general or specific orders. The question to beconsidered is whether the first respondent was justified in limiting theextent of relief to the petitioner as ordered in Ext. P9 . 6. Considering the facts and circumstances of the case, thisCourt finds that there is considerable force in the submission made bythe learned counsel for the petitioner in this regard. The reason torestrict the relief, despite the satisfaction as to the genuineness of theclams is not discernible from Ext. P9. The dispute is not with regard tothe power of the respondents to grant the relief in part, but with regardto the rationale in the restriction impose. In the said circumstances,the matter requires to be reconsidered by the first respondent.Accordingly, Ext. P9 is set aside and the first respondent is directed toconsider the matter afresh, after conducting a fresh enquiry, taking noteof all the relevant facts and circumstances, of course after giving anopportunity of hearing to the petitioner. This shall be done, asexpeditiously as possible, at any rate within 'three months' from thedate of receipt of a copy of this judgment. The Writ Petition is disposed of Sd/- P. R. RAMACHANDRA MENON, JUDGE kmd