1998 (9) TMI 51 - HC - Wealth-tax

Summary

Issues:
1. Petition for quashing interest levied for delayed tax payment under Wealth-tax Act, 1957.
2. Retroactive effect of the insertion of sub-section (2A) in section 31.
3. Conditions for waiver of interest under sub-section (2A) of section 31.
4. Evidence of genuine hardship and circumstances beyond control for waiver of interest.
5. Completeness of facts provided regarding tax demands and payments.

Issue 1: Petition for Quashing Interest:
The petitioner, a religious charitable trust, sought to quash interest levied for delayed tax payment under the Wealth-tax Act, 1957. The Commissioner rejected the petitioner's plea for interest waiver under section 31(2) citing the decision in Saurashtra Agencies Pvt. Ltd. v. Union of India [1990] 186 ITR 634 (Cal) as precedent.

Issue 2: Retroactive Effect of Amendment:
The crux of the matter revolved around the retroactive effect of the insertion of sub-section (2A) in section 31. The petitioner argued for retrospective application, while the respondent contended that the amendment was not retrospective, citing legislative intent effective from October 1, 1984.

Issue 3: Conditions for Interest Waiver:
The judgment emphasized that before directing interest waiver, the petitioner must establish the retrospective effect of the amendment and fulfill conditions under sub-section (2A) of section 31. These conditions include genuine hardship, circumstances beyond control, and cooperation in assessment proceedings.

Issue 4: Evidence of Hardship and Control Circumstances:
The court noted the absence of evidence proving genuine hardship or lack of control over tax payment by the petitioner. The provided figures regarding tax demands and payments were deemed incomplete, raising doubts about the petitioner's fulfillment of the conditions for interest waiver.

Issue 5: Completeness of Facts Provided:
Critical analysis of the figures presented by the petitioner revealed discrepancies in disclosing the full extent of tax demands and payments since 1957. The court highlighted the importance of furnishing complete and accurate information to support claims for interest waiver.

In conclusion, the court dismissed the petition, citing the lack of retrospective effect of the amendment and the petitioner's failure to satisfy the conditions for interest waiver under sub-section (2A) of section 31. The judgment underscored the significance of providing comprehensive evidence to substantiate claims in tax-related matters.