2013 (1) TMI 266 - HC - Income Tax

Waiver of interest imposed u/s 234A - delay in filing the returns for the assessment year 2001-02 and 2002-03 - Held that - It is a fact that the documents were given to the petitioner only after more than two years. But the reasons stated by the Chief Commissioner would unequivocally indicate that initially the request was made to release the books of accounts and documents; then the returns were prepared even without the originals. The assessee had requested for copies of the books and documents only by 23/03/2004 which was later supplied after the alleged delay. But it is indicated that from the returns it was found that unaccounted transactions have been included, the same could have been done without verification of the records. Though the assessee was requesting for the records it did not make any difference as the returns were not in terms with the documents produced and there were unaccounted transactions. This finding of fact by Chief Commissioner has resulted in not exercising the jurisdiction to waive interest completely. However, a small concession has been granted on account of the fact that there had been some delay on the part of the department in providing the copies of the documents. Therefore, this is a case where the assessee was only trying to point out the non-availability of records as a reason for not filing the returns in time. Returns were considered and Exts.P12 and P13 assessment orders were passed intimating the unaccounted transactions also. That being the situation, there will be no justification for this Court to extend the scope of judicial review to Ext.P15 order. No reason to find any illegality or arbitrariness in the said decision nor can it be stated to be unreasonable. This Court cannot sit in appeal against the said finding of fact by the Chief Commissioner. In the light of the above discussion, the writ petition fails and the same is dismissed.

Issues Involved:
1. Waiver of interest under Section 234A of the Income Tax Act.
2. Delay in filing returns for assessment years 2001-02 and 2002-03.
3. Justification for the delay attributed to the impounding of documents.
4. Evaluation of the Chief Commissioner's decision regarding partial waiver of interest.
5. Judicial review of the Chief Commissioner's discretion.

Issue-wise Detailed Analysis:

1. Waiver of interest under Section 234A of the Income Tax Act:
The petitioner challenged the imposition of interest under Section 234A for the delay in filing returns for the assessment years 2001-02 and 2002-03. The petitioner sought a complete waiver of this interest, arguing that the delay was due to circumstances beyond his control, specifically the impounding of documents by the Income Tax Department.

2. Delay in filing returns for assessment years 2001-02 and 2002-03:
The returns for the assessment years 2001-02 and 2002-03 were due on 31/08/2001 and 31/08/2002, respectively, but were filed only on 03/10/2006. The petitioner attributed this delay to the impounding of documents by the Assistant Director of Income Tax (Investigation), Calicut, on 14/02/2002, which were necessary for preparing the returns.

3. Justification for the delay attributed to the impounding of documents:
The petitioner argued that he had repeatedly requested the release of the impounded documents, starting with a letter dated 28/01/2004 to the ADIT (Investigation) and subsequent communications with the Income Tax Officer. Despite these requests, the documents were not made available until much later, leading to the delayed filing of returns.

4. Evaluation of the Chief Commissioner's decision regarding partial waiver of interest:
The Chief Commissioner concluded that the delay was not entirely due to the non-availability of the documents. The Commissioner noted that the petitioner did not make a genuine effort to obtain the documents promptly and prepare the returns. The Chief Commissioner partially waived 50% of the interest for the period from January 2006 to September 2006, considering that the petitioner's attempts were not wholehearted.

5. Judicial review of the Chief Commissioner's discretion:
The Court examined whether the petitioner was entitled to a complete waiver of interest from 24/01/2004 onwards. The Chief Commissioner's detailed analysis indicated that the petitioner could have taken steps to ascertain the location of the documents and obtain copies in a timely manner. The petitioner's actions appeared to be calculated moves to delay filing returns and avoid disclosing unaccounted transactions. The Court found no illegality or arbitrariness in the Chief Commissioner's decision and upheld the partial waiver of interest, dismissing the writ petition.

Conclusion:
The Court upheld the Chief Commissioner's decision to partially waive the interest under Section 234A, finding no justification to extend judicial review or interfere with the discretion exercised. The petitioner's delay was not entirely attributable to the impounding of documents, and the partial waiver was deemed appropriate. The writ petition was dismissed.

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