2016 (6) TMI 261 - HC - Income Tax

Waiver of interest u/s 139 (8) for delay in filing of the return rejected - time limit under Rule 117A of the Rules for filing an application seeking waiver of interest? - condonation of delay - Held that - The fact of the matter is that the Petitioner waited for around nine years after the order of the CIT(A) dated 6th/26th December 1990 before again approaching the AO under Rule 117 A for waiver of interest. While Rule 117 A does not expressly bar a second application and does not prescribe any limitation, the Petitioner has no satisfactory explanation for the extraordinary delay in filing the fresh application. The pendency of other proceedings at various fora does not constitute a sufficient justification in this regard. Further as far the revision petition is concerned, the proviso to Section 264 (3) permits the CIT to condone the delay in filing such petition beyond one year from the date of communication of the order seeking to be revised, if the petitioner is able to show that he was prevented by sufficient cause from making such application. Qua the first order dated 3rd March 1990 of the AO rejecting the Petitioner s application for waiver of interest, the delay in preferring the revision petition was time barred and the delay was not adequately explained. As regards the second order dated 17th September 2001 of the AO, as rightly pointed out by the CIT in the impugned order dated 20th March 2002, even assuming that the order dated 6th/26th December 1990 of the CIT (A) constituted a fresh cause of action for seeking waiver of interest, the delay of more than 9 years in filing the second application under Rule 117 A was not sufficiently explained. - Decided against assessee.

Summary

Issues:
Challenge to order rejecting petition under Section 264 of the Income Tax Act for waiver of interest.

Analysis:
1. The petitioner filed a return of income for the Assessment Year 1985-86 belatedly, resulting in interest charged under Section 139 (8) of the Act due to a delay of 14 months. An initial application for waiver of interest was rejected by the Assessing Officer, citing the delay in taking inspection of records as attributable to the Assessee.

2. Subsequently, a penalty was imposed under Section 271 (1) (a) of the Act, which was later deleted by the Commissioner of Income Tax (Appeals) due to the delay in allowing timely inspection of documents being attributed to the Revenue, not the Assessee.

3. After a lapse of over nine years, the petitioner filed another application seeking waiver of interest, which was rejected by the Assessing Officer on the grounds of insufficient evidence indicating prevention for sufficient cause created by the Revenue.

4. The Commissioner of Income Tax rejected the revision petition under Section 264 of the Act, citing a delay of more than 10 years in approaching the Assessing Officer, which was not sufficiently explained by the petitioner.

5. The petitioner argued that Rule 117 A of the Rules did not specify a time limit for filing an application seeking waiver of interest and did not prohibit multiple applications. The petitioner contended that the order deleting the penalty constituted a fresh cause of action for seeking waiver of interest, challenging the rejection based on delay.

6. The Court observed that while Rule 117 A did not explicitly bar a second application and did not prescribe a limitation, the petitioner failed to provide a satisfactory explanation for the significant delay in filing the fresh application, despite the pendency of other proceedings not justifying the delay.

7. Regarding the revision petition, the Court noted that the delay in filing beyond one year from the date of communication of the order sought to be revised could be condoned if the petitioner showed being "prevented by sufficient cause." However, the delay in filing the revision petition regarding the initial order and subsequent order was not adequately explained.

8. Ultimately, the Court found no legal infirmity in the impugned order of the Commissioner of Income Tax, leading to the dismissal of the writ petition and application with no orders as costs.