2016 (11) TMI 606 - HC - Income Tax

Waiver or reduction of interest in terms of the order F.No.400/234/95IT( B) dated 23.5.1996 issued under Section 119(2)(a) - Application of provisions of Section 54(F) (4) - return being filed after the due date and the Petitioner not having paid Advance tax the assessing officer levied interest under Sections 234A, 234B and 234C vide order dated 13.3.2001 Held that - Mr. Chatterjee s, Senior Counsel appearing on behalf of the petitioner contention is that the Petitioner received possession and therefore entire price was deemed to be appropriated towards purchase price of the residential flat does not commend itself to us as already negatived in our order dated 18th August, 2016 in the petitioner s appeal. Furthermore, the phrase as the case may be does not carry the Petitioner s case any further. In our opinion, in the facts of the present case the petitioner is not entitled to benefit of order F.No.400/234/95IT( B) dated 23.5.1996 and we are unable to appreciate Mr. Chatterjee s contention that the expression as the case may be used in paragraph 2(d) of the order issued by the CBDT can come to the petitioner s rescue. We must point out that no decision of this Court on the interpretation of Section 54F(4) of the Act (as in force at the relevant time) was brought to our notice which took a view that no tax is payable on the amounts of gain made on sale of land, if not invested and also not deposited in the specified bank account as mandated by Section 54F(4) of the Act. Further, the waiver or reduction is entirely discretionary and the provisions that the circular merely indicate the conditions precedent to exercise of such discretion. The Chief Commissioner of Income Tax while considering the application dated 7th August, 2002 for waiver or reduction of tax has observed that discretion must be exercised strictly within the parameters laid down in the order. The parameters are binding upon the authorities and the petitioner was not entitled to such benefit, in case it does not fall within it. In the present facts, the petitioners have not been able to establish that non payment of the tax and/or non investment in the specified bank account in terms of Section 54F of the Act was on account of unavoidable circumstances or circumstances beyond control of the petitioner. The petitioner has not established that he is entitled to benefit of the order dated 23rd May, 1996 for waiver of interest. - Decided against assessee

Summary

Issues Involved:
1. Challenge to the order dated 5th October 2004 under Section 119(2) of the Income Tax Act, 1961.
2. Waiver of interest levied under Sections 234A, 234B, and 234C for the assessment year 1996-97.
3. Interpretation of clause 2(d) of the CBDT order [F.No.400/234/95-IT(B)] dated 23.5.1996 and its modification dated 30.1.1997.

Issue-wise Detailed Analysis:

1. Challenge to the order dated 5th October 2004 under Section 119(2) of the Income Tax Act, 1961:
The petitioner contested the order dated 5th October 2004, which rejected the application for waiver of interest levied under Sections 234A, 234B, and 234C of the Income Tax Act, 1961 for the assessment year 1996-97. The petitioner argued that the interest should be waived based on the CBDT order [F.No.400/234/95-IT(B)] dated 23.5.1996.

2. Waiver of interest levied under Sections 234A, 234B, and 234C for the assessment year 1996-97:
The petitioner was levied interest under Sections 234A, 234B, and 234C due to late filing of the return and failure to pay advance tax. The petitioner claimed exemption from capital gains under Section 54F, but failed to deposit the balance amount in a specified account. The interest levied was:
- Section 234A: ?53,580
- Section 234B: ?9,73,370
- Section 234C: ?700

3. Interpretation of clause 2(d) of the CBDT order [F.No.400/234/95-IT(B)] dated 23.5.1996 and its modification dated 30.1.1997:
The petitioner relied on clause 2(d) of the CBDT order, arguing that the phrase "as the case may be" should entitle him to relief. However, the court found that the phrase was used to cover alternatives such as a retrospective amendment of law or a Supreme Court decision, which did not apply to the petitioner's case. The court also noted that the modification dated 30.1.1997 made the phrase redundant.

Court's Analysis and Conclusion:
The court found that the petitioner failed to establish that the nonpayment of taxes was due to circumstances beyond his control. The court concluded that the petitioner was not entitled to the benefit of the CBDT order for waiver of interest. The court also noted that the waiver or reduction of interest is discretionary and must be exercised within the parameters laid down in the order.

Final Judgment:
- The rule was discharged.
- The writ petition was dismissed.
- No order as to costs.