2009 (9) TMI 54 - HC - Income Tax

Orders of CBDT u/s 119(2)(a) waiver of interest earlier waiver of interest granted on the basis of a circular / order dated 23.5.1996 and 30.01.1997 that circulars were withdrawn subsequently held that - Considering the limited prayer of the learned Senior Counsel appearing for the parties and taking into consideration the very order itself clearly states that when there is a rejection such petition may be reconsidered and decided in the new order dated 26.06.2006 no harm could be caused to the Department in reconsidering the very same issue especially when in identical matter between the same parties waiver had been given to the other group. entitled to get waiver

Summary

Issues:
- Disputes among partners and family members affecting assessments for multiple years.
- Seizure of account books by Income Tax Department leading to delayed filing of returns.
- Petitioners seeking waiver of interest under Section 234(A)(B)(C) of the Act.
- Interpretation of Circular F.No.400/234/95/IT(B) dated 23.05.1996 for waiver of interest.
- Discrepancy in granting waiver of interest to different groups within the same assessment year.
- Impact of subsequent CBDT order dated 26.06.2006 superseding previous circulars.
- Reconsideration of waiver application based on new CBDT order.

Analysis:
1. The judgment pertains to a batch of Writ Petitions filed by family members and partners of various organizations with disputes among them, affecting assessments for the years 1990-91 to 1993-94. Disagreements led to delays in finalizing accounts and filing returns, compounded by a surprise raid in February 1992 by the Income Tax Department, resulting in the seizure of account books. Consequently, returns for 1993-94 were delayed, leading to interest payment obligations under Section 234(A)(B)(C) of the Act.

2. The petitioners sought a waiver of interest under Section 234(A)(B)(C) citing reasons beyond their control for the delays. The Income Tax Department opposed the waiver, citing conditions in Circular F.No.400/234/95/IT(B) and subsequent orders superseding previous circulars. The Department argued that the petitioners did not meet the waiver conditions and should not challenge the rejection of their claims.

3. A discrepancy arose when another group received a partial waiver of interest under Section 234(A)(B) while the petitioners did not. The petitioners argued that this information was not presented during the initial waiver application. Both parties acknowledged the impact of the new CBDT order dated 26.06.2006 superseding previous circulars, leading to a reconsideration of waiver applications.

4. The Court, without delving into the merits of the case, remitted the matter back to the first respondent for fresh consideration in light of the new CBDT order. The judgment set aside the impugned order dated 21.03.2003 and directed the first respondent to reevaluate the waiver request in accordance with the law and the latest CBDT order, allowing the petitioners to present their case on merits. The Writ Petitions were allowed for reconsideration without costs, emphasizing the need for a fair review based on the updated guidelines.