2022 (6) TMI 1330 - HC - Income Tax

Interest levied for delay in the remittance of the taxes - Application seeking waiver of interest u/s 220 (2A) - voluntary disclosure of amounts by the respective petitioners in the course of the search - HELD THAT - Petitioners would stress upon the extreme hardships faced by the assessees in remitting taxes though with delay. Moreover he attributes the difficulties to the substantial delay on the part of the respondents in issuing refunds to the companies in which the petitioners were Directors. Had such refunds been paid in time he submits that the same would have been utilized by them to settle their tax demands earlier and intime. This submission would hold no water in the present case seeing as the demand of tax has been made on the admitted income offered by the petitioner to tax in the returns of income. Had it been a case where the tax demand had arisen on account of additions/disallowances to the admitted income the position may have been viewed differently. However seeing that the tax demand in the present case arises entirely from admitted income and the order of has assessed and attained finality there is no merit in these writ petitions. The impugned orders are confirmed and these writ petitions dismissed. Connected writ miscellaneous petitions are closed.

Summary

Issues:
Challenge to order rejecting waiver of interest under Section 220(2A) of the Income Tax Act, 1961.

Analysis:
The petitioners contested an order dated 28.03.2019 under Section 220(2A) of the Income Tax Act, 1961, which dismissed their application for interest waiver. A search conducted on 18.12.2012 led to voluntary disclosures of significant amounts by the petitioners. Subsequent assessments were finalized based on these disclosures, bringing the disclosed amounts under tax purview. The petitioners were required to pay the tax demand, including interest, arising from the disclosed income. Although penalty was also imposed, the focus of the petitions was on interest waiver, not the penalty appeals. The petitioners sought to justify their delay in remitting taxes by citing hardships and delays in refund issuance by the respondents to companies where the petitioners were Directors. However, the court noted that the tax demand was based on admitted income, not on additions or disallowances, and that the assessments had achieved finality. Consequently, the court found no merit in the petitions, upheld the impugned orders, and dismissed the writ petitions, closing the connected miscellaneous petitions without costs.