2012 (4) TMI 415 - HC - Income Tax

Denial of waiver of interest, levied under Section 234A, B and C of the Income Tax Act Held that - there is no provision in the Act, providing for waiver of such interest notification dated 23.05.1996 provides the circumstances in which such waiver is permissible which says that where the return of income could not be filed by the assessee due to unavoidable circumstances and it was later filed voluntarily without detection by the Assessing Officer - no details thereof have been furnished by assessee and this factual issue was not established before the 1st respondent - denial of the request for waiver of interest cannot be said to be against the provisions of the notification against assessee. Request for waiver of interest levied under Section 220(2) Held that - Apart from the pleading that the non-payment of tax was due to reasons beyond the control of the assessee, the assessee has not established this factual question - the ingredients of the other conditions specified in Section 220(2)(a) also are not established against assessee.

Summary

Issues:
Challenge to orders rejecting waiver of interest under Section 234A, B, and C of the Income Tax Act (Ext.P5), and rejection of application for waiver of interest under Section 220(2) of the Income Tax Act (Ext.P6).

Analysis:

Issue 1: Waiver of interest under Section 234A, B, and C of the Income Tax Act (Ext.P5)
- The petitioner challenged Ext.P5 order rejecting waiver of interest under Section 234A, B, and C.
- Waiver of interest under these sections is not provided in the Act but permissible under a notification issued by the Board.
- The notification allows waiver under specific circumstances, such as when the return could not be filed due to unavoidable circumstances.
- The petitioner failed to provide details justifying the request for waiver, as required by the notification.
- The factual matters justifying the delay in payment must be established by the assessee.
- The application for waiver did not sufficiently detail the unavoidable circumstances, leading to the rejection of the request.
- The court upheld the Ext.P5 order as the petitioner did not meet the requirements for waiver under the notification.

Issue 2: Waiver of interest under Section 220(2) of the Income Tax Act (Ext.P6)
- Ext.P6 dealt with the request for waiver of interest under Section 220(2) of the Income Tax Act.
- Section 220(2)(a) specifies the circumstances to be established by the assessee for claiming waiver.
- Precedent dictates that all three circumstances under Section 220(2)(a) must be proven by the assessee.
- The petitioner failed to establish that non-payment was beyond their control, a key condition for waiver.
- Other conditions under Section 220(2)(a) were also not met, leading to the rejection of the waiver request.
- The court found the decision of the 1st respondent in Ext.P6 to be lawful based on the lack of factual establishment by the assessee.

Conclusion:
- The court dismissed the writ petition as it found no merit in challenging the rejection of waiver of interest under both Ext.P5 and Ext.P6.
- The judgment emphasized the importance of establishing factual circumstances justifying waiver requests under the relevant sections of the Income Tax Act.

This comprehensive analysis of the judgment highlights the key issues, legal interpretations, and outcomes related to the challenge of waiver of interest under specific sections of the Income Tax Act as addressed in the Kerala High Court.