2015 (12) TMI 402 - HC - Income Tax

Waiver of interest charged under Sections 234A and 234B seeked - Held that - Interest charged under Section 234B of the Act was waived by respondent No.1 as the enhanced compensation and interest thereon was received by the assessee much after the due date for depositing the advance tax and for furnishing the returns of income for the assessment years 1988-89 to 1996-97. It was recorded that in such circumstances, the assessee could not have anticipated or determined the interest income that had accrued to him under the orders of the Land Acquisition Court prior to disbursement by HUDA on 13.12.1995 and 29.2.1996. On that basis, respondent No.1 held the assessee entitled to waiver of interest charged under Section 234B of the Act for the assessment years 1988-89 to 1995-96 upto 29.2.1996 Learned counsel for the assessee-petitioner could not demonstrate that there existed any illegality or perversity in the approach of respondent No.1 which may warrant interference by this Court. The discretion had been rightly exercised by respondent No.1 and no error could be pointed out in the impugned order dated 9.10.2014 (Annexure P-15). - Decided against assessee.

Summary

Issues:
1. Waiver of interest charged under Sections 234A and 234B of the Income Tax Act, 1961 for the assessment years 1988-89 to 1996-97.

Analysis:
The petitioner filed a writ petition under Articles 226/227 of the Constitution of India seeking to set aside and modify an order passed by respondent No.1 regarding the waiver of interest charged under Sections 234A and 234B of the Income Tax Act, 1961. The case involved the predecessor-in-interest of the petitioner, who had land acquired by the government. Various legal proceedings ensued, leading to a dispute over compensation and interest. The Assessing Officer issued notices for filing returns, and ultimately interest was charged under Sections 234A and 234B of the Act. The petitioner sought a waiver of this interest, leading to the writ petition challenging the order dated 9.10.2014 (Annexure P-15) passed by respondent No.1.

The High Court analyzed the case in detail, addressing the waiver of interest under Section 234A of the Act first. Respondent No.1 waived the interest charged under Section 234A for the assessment years 1988-89 to 1996-97 till 31.5.2001, based on the issuance of the TDS certificate to the assessee on 29.5.2001. The court examined the relevant CBDT notifications and upheld the waiver of interest under Section 234A as per the provisions. The court provided a comprehensive table listing the assessment years and the period for which interest was waived, concluding that the assessee was entitled to the waiver as per the notifications.

Moving on to the waiver of interest under Section 234B of the Act, the court found that the enhanced compensation and interest were received by the assessee after the due date for depositing advance tax and filing returns for the relevant assessment years. Considering the circumstances, the court agreed with respondent No.1's decision to waive the interest charged under Section 234B for the assessment years 1988-89 to 1995-96 up to 29.2.1996. The court referenced the CBDT's Notification dated 2.5.1994 and detailed the specific assessment years and the corresponding period for which interest waiver was applicable. The court upheld the decision of respondent No.1, stating that the assessee fulfilled the conditions for the waiver as per the relevant provisions.

In conclusion, the High Court dismissed the writ petition after finding no merit in the petitioner's arguments. The court affirmed the decisions of respondent No.1 to waive the interest charged under Sections 234A and 234B of the Income Tax Act, 1961 for the specified assessment years based on the legal provisions and circumstances presented in the case. The court held that the discretion exercised by respondent No.1 was appropriate, and no legal errors were identified in the impugned order dated 9.10.2014 (Annexure P-15).