2008 (9) TMI 124 - HC - Income Tax

Petitioner s claim for waiver of interest under Sections 234B and 234C - rejected the request for waiver on the ground that he has not satisfied the condition prescribed in the Board s circular held that respondent (Chief Commissioner of Income Tax) shall consider the circumstances under which the petitioner was unable to pay the tax earlier and also the justification of his seeking for waiver and refund of the interest amount paid

Summary

Issues:
Challenge to rejection of waiver of interest under Sections 234B and 234C by Chief Commissioner of Income Tax.

Analysis:
1. The petitioner, an assessee under the Income Tax Act, challenged the order of the Chief Commissioner rejecting the waiver of interest under Sections 234B and 234C. The rejection was based on the grounds that the conditions for waiver were not satisfied, despite the voluntary filing of the income tax return by the petitioner.

2. The respondent argued that as long as the petitioner satisfies the conditions precedent for seeking waiver of interest, the impugned order is valid. The respondent referred to the preconditions prescribed in the circular and stated that they were not fulfilled by the petitioner.

3. The petitioner cited a Division Bench judgment of the Gujarat High Court, emphasizing that if the delay in filing the return of income was due to unavoidable circumstances, the assessee should be allowed to persuade the authority to condone the delay in tax payment for reasons beyond their control.

4. The petitioner contended that the conditions for persuading the authority are not exhaustive and not limited by the circular issued by the Board. The only requirement is for the Commissioner to be satisfied with the genuine claim made by the assessee for waiver of interest.

5. The petitioner provided reasons for the delay in payment and filing, arguing that the delay was explained, and there were valid circumstances for seeking waiver of interest. An additional typed set was filed to support the petitioner's claim.

6. Reference was made to another Division Bench judgment of the Madras High Court, which highlighted that the Chief Commissioner has the authority to waive or reduce interest if satisfied that it is a fit case to do so based on the facts and circumstances. The Court emphasized the importance of considering unavoidable circumstances and facts of the case before rejecting a claim for waiver of interest.

7. The Court held in favor of the petitioner, directing the first respondent to reconsider the circumstances under which the petitioner was unable to pay the tax earlier and justify the waiver and refund of the interest amount paid. The first respondent was instructed to consider any additional points raised by the petitioner and pass an appropriate order within four weeks.

8. The writ petition was disposed of with the above directions, without any costs imposed on either party.