2007 (11) TMI 254 - HC - Income Tax

Penalty for failure to file return in time - CIT(A) rejected the petitioner s application filed u/s 273A, for waiver of interest u/s 139(8) & sec. 217 and penalty levied u/s 271(1)(a) & section 273(1)(b) - It is found in exhibit P11 that the petitioner had not made any payment of interest or penalty or made any arrangement for payment of the said sum, so there is no justification to interfere with the impugned order of CIT(A) assessee s appeal dismissed

Summary

Issues:
Challenge to order rejecting application for waiver of interest and penalty under sections 139(8), 217, 271(1)(a), and 273(1)(b) of the Income-tax Act, 1961.

Analysis:
The judgment addresses the challenge to the order (exhibit P11) where the Commissioner of Income-tax rejected the petitioner's application for waiver of interest and penalty under specific sections of the Income-tax Act, 1961. Section 273A allows waiver of interest and penalty only if the assessee cooperates in the inquiry and fully discloses income, along with making satisfactory arrangements for payment. The petitioner failed to make any payment or arrangement for payment of the sum demanded for the assessment years 1983-84 to 1986-87. Despite the petitioner's claim of making payment arrangements, there was no evidence presented regarding the nature of these arrangements. The petitioner did not comply with the conditions for waiver, as no payment was made before the application's disposal. Additionally, the petitioner's claim under the Kar Vivad Samadhan Scheme was not utilized, further weakening the case for waiver. The court highlighted the necessity for an assessee to satisfy conditions for interest waiver, as established in previous court decisions, emphasizing the lack of compliance by the petitioner in this instance.

The judgment emphasizes that the petitioner's failure to meet the essential conditions for interest and penalty waiver, including non-payment and absence of payment arrangements, led to the dismissal of the challenge to the order. The Commissioner rightly rejected the application under section 273A due to the petitioner's non-compliance with the required conditions, even at the time of filing the original petition. The court cited precedents, such as the case of P. A. Mohammed Abdul Khader and Co. v. CIT [1978] 112 ITR 552, to reinforce the principle that interest waiver can only be claimed if all conditions are met. As the petitioner did not fulfill any conditions for waiver and failed to demonstrate compliance even during the proceedings, the judgment concluded that there was no basis to interfere with the impugned order. Consequently, the original petition was deemed meritless and dismissed by the court.