Wp(C)/9766/2009 Of M.james v. The Income Tax Officer, Kannur And Othe

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC TUESDAY, THE 27TH DAY OF NOVEMBER 2012/6TH AGRAHAYANA 1934 WP(C).No. 9766 of 2009 (M) -------------------------- PETITIONERS:------------- M.JAMES,PP-VI/125,MANGARA HOUSE, OPP;ST.JUDE CHURCH,P.O.,THADIKKADAVU CHANOKUNDU,TALIPARAMBA TALUK,KANNUR DISTRICT. BY ADVS.SRI.T.M.SREEDHARAN SMT.C.K.SHERIN SRI.V.P.NARAYANAN RESPONDENTS:-------------- 1. THE INCOME TAX OFFICER, WARD-1,KANNUR. 2. THE ADDITIONAL COMMISSIONER OF INCOME TAX,RANGE 1,KANNUR. 3. THE COMMISSIONER OF INCOME TAX, KANNUR. 4. THE TAX RECOVERY OFFICER, RANGE-1,KANNOTHUMCHAL,KANNUR. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 27-11-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: PETITIONER'S EXHIBTS: P1: TRUE COPY OF NOTICE DT.9.2.2009 ISSUED BY R4 TO THE PETITIONER. P2: TRUE COPY OF STATEMENT OF ARREARS FURNISHED BY R4. P3: TRUE COPY OF APPLICATION DT.23.8.08 FOR WAIVER OF INTEREST SUBMITTED BY THE PETITIONER BEFORE R2 UNDER SEC.139(8). P4: TRUE COPY OF APPLICATION DT.1.3.08 FOR WAIVER OF INTEREST SUBMITTEDBY THE PETITIONER BEFORE R2 UNDER SEC.217. P5: TRUE COPY OF THE APPLICATION DT.23.2.09 SUBMITTED BEFORE R3 BY THEPETITIONER UNDER SEC.220(2). P6: TRUE COPY OF REPRESENTATION DT.12.2.2009 SUBMITTED BY PETITIONER TOR2. P7:TRUE COPY OF JUDGMENT DT.4.3.2009 IN WPC NO.6590/2009 OF THE HIGHCOURT OF KERALA. P8: TRUE COPY OF ORDER DT.12.3.2009 PASSED RELATING TO WAIVER OFINTEREST U/S.139(8). P9: .DO..DO.U/S.217.P10: TRUE COPY OF ORDER C.NO.220-6/CIT/KNR/08-09 DT.19.3.2009 PASSED BYR3. P11: TRUE COPY OF NOTICE DT.27.2.2009 UNDER RULES 38 AND 52 OF THE TAXRECOVERY RULES ISSUED BY R4. P12: TRUE COPY OF PETITION FILED UNDER RULE 40 OF THE IT RULESDT.12.3.2009 SUBMITTED BY PETITIONER BEFORE R1. P13: TRUE COPY OF PETITION UNDER RULE 117A OF THE IT RULES DT.12.3.2009SUBMITTED BY PETITIONER BEFORE R1. P14: TRUE COPY OF ORDER DT.23.2.2007 PASSED BY R3. P15: TRUE COPY OF PROCEEDINGS DT.27.12.2001 PASSED BY R1. P16: TRUE COPY OF NOTICE OF DEMAND IN FORM NO.57 DT.6.8.2004 ISSUED BYR4. P17: TRUE COPY OF RECEIPT DT.30.3.2009 ISSUED BY THE TAX RECOVERYOFFICER, RANGE-1, KANNUR. P18: TRUE COPY OF RECEIPT DT.15.4.2009 ISSUED BY THE TAX RECOVERYOFFICER, RANGE-1, KANNUR. TRUE COPY pms P.S. to Judge ANTONY DOMINIC, J. .................................................................... W.P.(C) No.9766 of 2009 .................................................................... Dated this the 27[th] day of November, 2012. JUDGMENT Heard learned Senior counsel for the petitioner and the learnedcounsel for the respondents. 2. Petitioner's father late Sri.Chacko Mathew was a partner in afirm by name Malanadu Liquors. His father expired on 20.6.1994. Thechallenge in this Writ Petition pertains to Exts.P8, P9 and P10 ordersrejecting the applications made by the petitioner seeking waiver ofinterest on the tax liability of the firm for the assessment year 1981-82.In so far as Exts.P8 and P9 are concerned, those orders were passed onExts.P3 and P4 applications filed by the petitioner, seeking waiver ofinterest levied under Sections 139(8) and 217 of the Income Tax Act.Reading of Exts.P8 and P9 orders passed by the second respondentshows that the authority competent to consider Exts.P3 and P4 is theAssessing Officer, the first respondent. However, after holding that hehad no jurisdiction to entertain the application, he went into the meritsof the claim and held that the petitioner is not eligible for waiver. W.P.(C) No.9766/2009 W.P.(C) No.9766/2009 3. In my view, once the second respondent has realised that hehad no jurisdiction to have entertained Exts.P3 and P4, he had noreason to have adjudicated the entitlement to the petitioner on meritsand instead he should have left the matter at that stage so that thepetitioner could have moved the competent authority for waiver. Inthis case both sides submit that subsequently petitioner filed Exts.P12and P13 before the first respondent, the competent authority, seekingwaiver as permissible under Rule 40 and Rule 117A of the Income TaxRules. In such circumstances, I set aside Exts.P8 and P9 and direct thatthe first respondent shall consider Exts.P12 and P13 in accordance withlaw and pass orders thereon. 4. Now what remains is Ext.P10. Ext.P10 order was passed bythe third respondent on Ext.P5 application filed by the petitioner underSection 220(2A) of the Income Tax Act seeking waiver of interestlevied on the petitioner under Section 220(2) of the said Act. Readingof this order shows that the claim of the petitioner has been rejected onmerits on the ground that the petitioner has not cumulatively satisfiedthe conditions specified in Section 220(2A). In this order the third W.P.(C) No.9766/2009 respondent has accepted that by October 2008 the petitioner has paidthe entire principal demand of tax. However, as far as the financialhardship which is to be proved by the applicant is concerned, it hasbeen held that the petitioner has failed in proving the financial hardshipof the other partners of the firm also. As far as this aspect of the matteris concerned, in Ext.P5 what was sought by the petitioner is that heshould be relieved of the interest liability. In such a situation he cannotbe expected to prove the financial hardship of the other partners of thefirm who are not the applicants. In such a case the Officer could nothave insisted that the petitioner should prove the financial hardship ofthe other partners and should not have rejected his application on hisfailure. 5. It is also held that there was no co-operation in the assessmentand recovery. First of all, such a non-operation could have beenattributed against the assessees and could not have been attributedagainst a legal heir. On the other hand, the order itself discloses thatthe petitioner has paid the entire tax demand in instalments. The thirdcondition is that the default should be for reasons beyond the control of W.P.(C) No.9766/2009 the assessee. It is seen that the petitioner has filed a representationsupplying the facts, which according to him, justifies his request thatthere has been no proper consideration of that aspect also. In such circumstances, I am not satisfied that there has been aproper consideration of the petitioner's request as required underSection 220(2A). For that reason I set aside Ext.P10. The thirdrespondent is directed to consider Ext.P5 and pass fresh orders inaccordance with law. Writ Petition is disposed of accordingly. ANTONY DOMINICJudge pms