1997 (2) TMI 35 - HC - Income Tax

Summary

Issues:
1. Discrepancy in the treatment of waiver of interest under sections 139(8) and 217 of the Income-tax Act for two brothers by the taxing authorities.

Analysis:
The judgment pertains to two writ petitions filed by two brothers challenging the orders passed by the Commissioner of Income-tax for the assessment years 1987-88 and 1988-89. Both brothers had invested in a partnership firm and were assessed for taxable income. The Assessing Officer charged interest under sections 139(8) and 217 of the Act. One brother's plea for waiver of interest under section 139(8) was accepted, while the other brother's plea was rejected. Similarly, one brother's interest under section 217 was waived partially, while the other brother's interest was sustained for a year. The court noted the identical circumstances of the cases and found no justification for the divergent treatment by the taxing authorities.

The court highlighted that interest under section 139(8) is charged for late filing or non-filing of returns, while interest under section 217 is charged for failure to file advance tax statements. Despite similar circumstances, the taxing authorities had taken different approaches in granting waivers of interest to the two brothers. The court found no valid reason for this discrepancy and deemed it unfair and unjustified. Consequently, the court allowed both writ petitions and directed that the interest charged under section 217 for one brother and under section 139(8) for the other be waived partially, aligning with the decisions made for the other brother in similar circumstances.

In conclusion, the court ruled in favor of the petitioners, the two brothers, by allowing the writ petitions and ordering the waiver of interest in a manner consistent with the treatment given to the other brother in similar situations. The judgment rectified the discrepancy in the treatment of waiver of interest under sections 139(8) and 217 by the taxing authorities, emphasizing the need for fair and consistent application of tax laws.