2016 (8) TMI 1091 - HC - Income Tax

Waiver of interest charged under Section 220 (2A) application rejected - Held that - The Commissioner of Income Tax who is competent authority to consider the question of waiver has noticed that Assessee has maintained certain documents showing goods taken on Uchanti (goods taken on returnable basis from parties) but same were recorded as sales in accounts and thus he was found guilty of undisclosed income leading to evasion of tax and for that reason Assessing Officer found him guilty of evasion of tax which was affirmed in Appeal. Further there was nothing to place before authorities concerned to show that it was a case of genuine hardship of Assess. Since these all are findings of fact and it has not been shown that findings recorded by CIT are perverse we do not find that we can look into matter and examine the same as sitting in appeal since in supervisory jurisdiction of this Court and exercising writ jurisdiction scope of judicial review is very limited and narrow. It is not to correct the errors in the orders of the court below but to remove manifest and patent errors of law and jurisdiction without acting as an appellate authority. This power involves a duty on the High Court to keep the inferior courts and tribunals within the bounds of their authority and to see that they do what their duty requires and that they do it in a legal manner. But this power does not vest the High Court with any unlimited prerogative to correct all species of hardship or wrong decisions made within the limits of the jurisdiction of the Court or Tribunal. It must be restricted to cases of grave dereliction of duty and flagrant abuse of fundamental principle of law or justice where grave injustice would be done unless the High Court interferes. In the present case no justification interference by this Court in this writ petition in exercise of jurisdiction under Article 226 of Constitution of India

Summary

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

Analysis:
The petitioner challenged the order rejecting the waiver of interest charged under Section 220(2A) of the Income Tax Act, 1961. The Commissioner of Income Tax found the petitioner guilty of undisclosed income, leading to tax evasion. The Commissioner observed that the petitioner did not demonstrate genuine hardship to warrant the waiver. The High Court emphasized that its role is not to correct errors in lower court orders but to address grave dereliction of duty or flagrant abuse of fundamental legal principles. The Court cited precedents to illustrate the limited scope of judicial review under Article 226 and 227 of the Constitution.

The Court highlighted that its power of superintendence aims to keep subordinate courts within their authority, intervening only in cases of grave injustice or fundamental legal violations. The judgment referenced various cases to emphasize that the High Court cannot act as an appellate authority and should not substitute its views for lower court decisions. The Court reiterated that interference under Article 227 is limited to cases where findings are perverse or patently erroneous.

The Court emphasized that its jurisdiction under Article 227 is supervisory, not appellate, and should not involve reappreciation of evidence. The judgment underscored that the High Court should not disturb factual findings unless they are perverse or unreasonable. The Court cited multiple cases to support its stance that interference is warranted only in exceptional circumstances where there is a grave abuse of legal principles or resulting in grave injustice.

In conclusion, the High Court dismissed the writ petition, stating that the impugned order did not meet the criteria for judicial interference under Article 226 of the Constitution. The Court found no merit in the petition and vacated any interim orders.