1996 (12) TMI 15 - HC - Income Tax

Business Premises, Delay In Filing Return, High Court Under Article 226, Income Tax, Previous Year, Sales Tax, Waiver Of Interest

Summary

Issues:
1. Waiver of interest under section 139(8) of the Income-tax Act, 1961.

Analysis:
The petitioner filed a petition under article 226 of the Constitution of India seeking total waiver of interest under section 139(8) of the Income-tax Act, 1961. The Commissioner of Income-tax had already granted a 50% waiver of interest, prompting the petitioner to approach the court for further relief. The case pertained to the assessment year 1986-87, where the return was filed after a significant delay. The initial income admitted was later revised, leading to a change in the interest amount levied by the assessing authority. The petitioner cited reasons for the delay, including finalizing business accounts and delays in ascertaining income from other sources. The petitioner also mentioned a search conducted at the business premises under section 132 of the Income-tax Act, stating that the delay was not intentional but due to unavoidable circumstances.

The appellate authority reduced the total income and the corresponding interest amount. The petitioner then applied for waiver of interest, invoking rule 117A(iv) and (v) of the Income-tax Rules, 1962. However, the application was rejected by the Assistant Commissioner of Income-tax, Cannanore, citing that the reasons provided did not align with the provisions of rule 117A. The petitioner then filed a revision petition under section 264 of the Income-tax Act, 1961, before the Commissioner of Income-tax, Cochin. The revisional authority considered factors such as the delay caused by a search under section 132 and disallowance under section 43B in granting a 50% waiver of interest.

The petitioner's counsel argued that the delay was also due to awaiting an audit report under section 44AB, which is mandatory for businesses over a certain threshold. However, the court noted that the delay between the due date of filing the return and the search conducted did not justify the delay in filing. The court emphasized the importance of timely filing and the mandatory nature of the audit report under section 44AB. Ultimately, the court upheld the decision of the revisional authority to grant a 50% waiver of interest, stating that no exceptional circumstances warranted further relief beyond what was already granted. The original petition was dismissed, affirming the waiver of interest to the extent of 50% as allowed by the revisional authority.