2004 (2) TMI 37 - HC - Income Tax

Notification dated May 23, 1996 - Reduction or waiver of penal interest for late filing of return of income, etc. - Authorisation of powers to Chief Commissioners and Directors-General (Investigation) - grievance of the petitioners is that though they had sought for certain relief from the operation of the provisions of sections 234A and 234B, it has been denied to them - order rejecting the petitioners request is one passed by the Commissioner but is communicated under the seal and signature of an Assistant Commissioner acting on behalf of the Commissioner - if the Commissioner has conveyed to the petitioners that he is unable to act in the matter, no exception can be taken. No legal right of the petitioners is involved nor is there any inaction on the part of the respondent authority - Commissioner could not have entertained the application for granting any relief as he does not have the power to extend such relief to persons like the petitioners in terms of the notification.

Summary

Issues:
Assessees seeking relief from provisions of sections 234A and 234B of the Income-tax Act, 1961.

Analysis:
The judgment involves writ petitions filed by assessees under the Income-tax Act, 1961, seeking relief from the provisions of sections 234A and 234B. The petitioners claimed that they had applied for waiver of interest under these sections, but their requests were denied without proper communication or issuance of an order by the Chief Commissioner of Income-tax. The petitioners argued that they were entitled to know the outcome of their applications based on a Board notification dated May 23, 1996, which allowed for reduction or waiver of interest under specific circumstances. However, the Commissioner rejected their applications without providing reasons for denial, leading the petitioners to seek a writ of mandamus to obtain a copy of the order and reasons for denial.

The notification issued by the Central Board of Direct Taxes empowered the Chief Commissioner of Income-tax to reduce or waive interest under sections 234A and 234B in certain cases specified in the notification. The petitioners relied on this notification to argue that they should have been informed of the decision and the reasons for denial of relief. The petitioners' counsel emphasized that the petitioners should at least be provided with an order indicating whether they qualify for relief under the notification and, if not, the reasons for denial.

The respondents contended that the petitioners did not have the right to claim relief as they did not meet the conditions specified in the notification. The respondents argued that the power to grant relief was limited to circumstances outlined in the notification and that the Commissioner could not extend benefits beyond those specified. The respondents also highlighted that the order rejecting the petitioners' request was communicated by an Assistant Commissioner on behalf of the Commissioner, indicating that the relief was not applicable to the petitioners.

The court held that a writ of mandamus could only be issued if the petitioner had a legal right and there was inaction on the part of the public authority. In this case, the petitioners did not qualify for relief under the notification, and the Commissioner did not have the authority to grant relief beyond the notification's scope. Therefore, the court found no legal right of the petitioners being violated and no inaction on the part of the respondent authority. Consequently, the court dismissed the petitions, stating that the petitioners could pursue other remedies available to them under the law.