2022 (4) TMI 973 - HC - Income Tax

Interest demand u/s 220(2A) - petitioner had delayed in paying the interest under Sections 234A, 234B and 234C - Earlier, the application for waiver of interest was rejected - petitioner submits that the petitioner is entitled for waiver of interest on interest as the petitioner has not only paid the tax determined by the respondent AO pursuant to the notice issued us 148 but also paid the interest demanded under Section 234A, 234B 234C of the Income Tax Act - HELD THAT - Sub Section (2A) is an exception to Sub Section (1). The facts of the case are not in dispute. The petitioner had made an incorrect declaration in his Income Tax Returns for the Assessment Year 2007-2008 and thus, the assessment was sought to be reopened on 31.03.2014. An Assessment Order dated 30.01.2015 came to be passed, pursuant to which, a Demand Notice dated 30.01.2015 was issued under Section 156 of the Income Tax Act, 1961 to the petitioner. As per the Demand Notice, the petitioner was required to pay a sum of ₹ 1,24,85,280/- as detailed above. The Demand Notice under Section 156 of the Act also stipulated that if the petitioner failed to pay the aforesaid amount within the period of thirty days from the date of the service of the Demand Notice, the petitioner will also be liable to pay a simple interest at 1.5% for every month or part of a month from the date commencing after the end of the period of 30 days in accordance with Section 220(2) of the Income Tax Act, 1961. The petitioner, however, failed to pay the interest in time. Instead, the petitioner filed an application under Section 220 of the Income Tax Act, to waive the interest of ₹ 1,24,85,280/-. The said application was dismissed on 28.12.2016. It is only thereafter the petitioner paid the amount quantified in the Demand Notice dated 30.01.2015 issued under Section 156 of the Act. As the petitioner failed to pay the amount in time, the petitioner is liable to pay the interest. Therefore, there is no merit in this present Writ Petition and is liable to be dismissed.

Summary

Issues:
1. Waiver of interest due on tax under Section 220(2) of the Income Tax Act, 1961 for the Assessment Year 2007-2008.

Detailed Analysis:
1. The petitioner initially filed a return for the Assessment Year 2007-2008 admitting an income of &8377; 1,57,410, later realizing an error and revising the income to &8377; 3,20,00,000 after the deadline for revised returns had passed.
2. The Assessing Officer demanded tax and interest under Sections 234A, 234B & 234C totaling &8377; 2,32,48,360, leading to a Demand Notice of &8377; 1,24,85,280.
3. The petitioner sought waiver of interest, leading to a series of legal actions, including a rejected waiver application and subsequent payment of the demanded amount.
4. Despite these actions, the petitioner faced further demands for interest, leading to repeated challenges and appeals against the demands and rejections of waiver applications.
5. The court examined the provisions of Section 220(2A) of the Income Tax Act, 1961, which allows for waiver of interest under specific conditions, including genuine hardship and circumstances beyond the assessee's control.
6. The court noted the petitioner's delay in payment and rejection of the waiver application, leading to the conclusion that the interest was rightfully demanded and payable by the petitioner.
7. Ultimately, the court dismissed the Writ Petition, stating that the petitioner's failure to pay the amount in time rendered them liable for the interest demanded, and no grounds for waiver were established.

This detailed analysis provides a comprehensive understanding of the judgment, focusing on the issues raised and the legal considerations applied by the court in reaching its decision.