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TMI Blog2006 (6) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... livered by Shiv Narayan Dhingra J.- This writ petition has been filed by the petitioner challenging three orders of the Assessing Officer all dated December 12, 2005, whereby the Assessing Officer rejected the application of the petitioner and refused to waive interest under rule 40(1) of the Income-tax Rules 1962, and under rule 117A of the Income-tax Rules, 1962, and praying for quashing of these orders. Writ petition made a prayer that interest charged for the assessment year 1985-86 and the assessment year 1986-87 be ordered to be waived. The brief facts giving rise to the application made by the petitioner for waiving interest are as under: (i) The petitioner was working as cost accountant with a private firm. A search had taken place of the premises of the employer of the petitioner and the premises of the petitioner were also searched on December 24, 1985. FDRs worth Rs. 1,05,000 in the name of the wife of the petitioner apart from jewellery belonging to his wife were found in search. The Department seized the FDRs and jewellery. The petitioner negotiated with the Department and agreed to surrender an income of Rs. 70,000 out of the FDRs that were in the name of his wife. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the FDRs were in the name of his wife. He had agreed to surrender the income of Rs. 70,000 only on the assurance given by the Department/respondent that no penalty would be levied and no interest would be charged. He also submitted that he was caught within the clutches of section 217, and section 139(8) only due to the settlement and in such cases interest was liable to be waived, under rule 40(1) and rule 117A(v) of the Income-tax Rules, 1962, since the petitioner would be deemed to have been prevented from riling advance tax. He submitted that on this account only the petitioner was not levied penalty for non-payment of advance tax and while disposing the appeal the learned Income-tax Appellate Tribunal had specifically observed: "The Income-tax Officer was also entitled to waive interest chargeable under various provisions of the Income-tax Act in view of specific rules 40 and 117A of the Income-tax Rules. The question relating to initiation and levy of penalty or dropping the same, is also covered within the scope of powers of the Assessing Officer. Hence, the acceptance of the offer by the Assessing Officer was fully within the legislative competence. Neither the assessee no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules 1962 on April 5, 2004. The original assessment was made under section 143(3) on September 12, 1986. The assessee filed the return on April 21, 1986. Assessment made on 12.9.1986 before one year from the date of filing the return. As per rule 40(i) the assessment was made before one year from the date of filing the return. Hence the application filed by the assessee is rejected. Dated: 12.12.2005 (H.C. PANT) ITO Ward 47(2) New Delhi copy to the assessee. It is argued by the petitioner's counsel that the petitioner's application for waiver was rejected without assigning any reason, much less good and sufficient reason. The grounds given by the petitioner in the written arguments were not at all considered and the respondent in a mechanical manner, rejected the application. The respondent was liable to allow the waiver of interest in view of the letter written by the Department to the petitioner at the time of the petitioner conditionally agreeing to surrender income of Rs. 70,000 out of the FDRs of his wife. The respondent was bound by the promise made to the petitioner and principle of promissory estoppel would apply. It is contended by the Department that the orders pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances of the case, in refusing to exercise his power under section 273A of the Income-tax Act, 1961, to waive interest and penalty where the assessee has disclosed income voluntarily in a revised return, is a question to be examined on the merits and the High Court, on a writ petition challenging such a refusal, ought not to dismiss the petition on the ground that the order was not liable to interference in exercise of its extraordinary jurisdiction'." This court in Dalmia Dairy Industries v. Union of India [2002] 255 ITR 476 observed as under: "Although the Commissioner is a high dignitary but it is trite that he must exercise his discretion judicially. Discretion cannot be exercised in a whimsical or fanciful manner. The Commissioner while exercising his jurisdiction under section 264 of the Income-tax Act exercises a judicial function and assignment of reasons is one of the basic ingredients of natural justice." In Chaitnya Charan Das v. State of West Bengal, AIR 1995 Cal 336 the Calcutta High Court held: "50. The submission of learned counsel appearing on behalf of the respondents to the effect that the Central Government has an unfettered discretion in the matter of gran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ient cause from furnishing the return within time and in the case of interest under section 217, upon whether the circumstances are such that a reduction or waiver of interest is justified. Thus, the exercise of discretion under rules 40(5) and 117A(v) is conditional upon the satisfaction of the authority concerned as to the existence of appropriate circumstances. The conclusion whether appropriate circumstances exist or do not exist will ordinarily be a finding of fact. But even a finding of fact can be reviewed by this court in writ jurisdiction in exceptional circumstances such as where the finding is not supported by any evidence or is perverse or based upon a view of facts which could never be reasonably entertained. However, the High Court cannot reappreciate the evidence itself as an appellate court or correct the error of fact (not going to jurisdiction) even if apparent on the ground that the evidence on which it was based was not satisfactory or sufficient. In other words, the court in writ jurisdiction is not to interfere with or reverse the conclusion of the Tribunal, if the conclusion is a possible conclusion. It cannot substitute its decision for that of the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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