9911796707
TMI Blog2004 (8) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... s application the petitioner has challenged an order dated December 4, 1989, passed by the Deputy Commissioner of Income-tax, Special Range-I (respondent No. 1 herein), whereby and whereunder the petitioner's applications for waiver and/or reduction of interest under rules 40(1) and 40(5) charged under section 215 of the Income-tax Act, 1961, for 23 months instead of 35 months has practically been rejected, granting for the period from March 1, 1986 to July 31, 1986. This application was made by the petitioner-assessee in relation to the assessment year 1984-85. It appears from the records that the first application was made under the provision of rule 40(1) of the Income-tax Rules. Subsequently, another application was made on behalf of the petitioner under the provision of rule 40, sub-rule (5). Both these applications were heard out and disposed of by respondent No. 1 by the impugned order, of course, with reasons. It appears from the impugned order that while rejecting the prayer of the petitioner, respondent No. 1 observed that the assessee maintains the accounts in such a way that unless the previous year's assessment is completed the next year's cannot be taken up for cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicially acceptable. Requirements of alleged deep scrutiny and examination of the books of account are no ground to deny the petitioner's right of having waiver under the aforesaid rules. Under the statutory compulsion the company being a multinational one is to maintain accounts and it is quite normal that the accounts of the petitioner must be elaborate and reasonable degree of complexity of the same is bound to occur. No reason has been assigned by the respondent as to why the proceedings have been initiated after a lapse of two years. Besides, the allegations of maintaining the accounts calculated to suppress income are falsified by the fact that no step was taken for realising penalty under section 271(1)(c) of the said Act. He further contends that the officer concerned has misunderstood the scope and purview of rule 40(1) of the said Rules, which is basically different and distinct from the provision of rule 40(5). His further argument is that once it is established that the reasons for delayed assessment are not attributable to the assessee, the power coupled with duty to grant waiver is a matter of course and mandatory. In support of his contention he has relied on the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; Bharat Commerce and Industries Ltd. v. Union of India [1991] 188 ITR 277 (Delhi); and L. Hirday Narain v. ITO [1970] 78 ITR 26 (SC) at page 31. Coming back to the merits of the case, Dr. Pal submits that the decision rendered by respondent No. 1 is patently perverse so much so that no reasonable person or body properly informed could have come to or arrived at such a decision. In support of this portion of his contention he has referred to a decision of the Supreme Court reported in CIT v. Mahindra and Mahindra Ltd. [1983] 144 ITR 225 (SC), at page 237. His next contention is that the provision of rule 40(1) is not power simpliciter but coupled with duty. It is a settled position of law that when a power coupled with duty is asked to be exercised the same must be done when called upon to do so. The plea of alternative remedy as raised by Mr. Some is, in my view, should not be entertained though such point was taken at the first instance. As rightly argued by Dr. Pal the revisional jurisdiction cannot be an efficacious and alternative remedy to discourage the writ court to entertain the writ petition. An efficacious and alternative remedy would be such effective machinery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of judicial review, for a writ court cannot substitute its own reasoning in place of reasonings recorded by respondent No. 1. Therefore, on this preliminary point the writ petition should be dismissed. He further submits that the order passed under rule 40(5) cannot be upset by the writ court. He has drawn my attention to a judgment of the Kerala High Court reported in Deputy CIT v. P.M. Antony [2002] 257 ITR 616 page 620 and submits that the learned single judge set aside an order passed by the appropriate officials under rule 40(1) of the said Rules. However, the Division Bench had set aside the same observing that it is not for the court to substitute its own discretion in place of that of the Assessing Officer. I have considered the respective contentions of the learned advocates and examined the materials. I have gone through the impugned order of the Assessing Officer. It appears to me that the Assessing Officer has recorded that returns for the assessment year was duly filed and the same was completed almost after two years. The reasons given in the impugned order are that unless the previous assessment was completed, the subsequent assessment could not be undertaken b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt held Brig. Anant Singh v. CIT [2003] 261 ITR 335 that if the delay occurred on account of search and seizure of the assessee, the delay cannot be attributable to the assessee and, therefore, the interest under section 215 is to be waived. Factually here the notice was issued after two years by the Department under section 143(1) of the said Act intending to initiate the assessment. Therefore, by no stretch of imagination this delay can be attributable to the assessee. The reasons assigned by respondent No. 1 that by reason of maintaining complex accounting system the deep and detailed enquiry was to be undertaken are, in my view, no basis and/or justification to refuse to grant appropriate relief under the aforesaid rules. The decision cited by Mr. Some of the Kerala High Court in Deputy CIT v. P.M. Antony [2002] 257 ITR 616 is inappropriate in this case as rightly argued by Dr. Pal because of the reason that factually in that case while making assessment it was found that the income of the assessee partner was required to be enhanced for revision of the amount of dividend given by the firm on its assessment by reason of the fact that the dividend derived from the partners ..... X X X X Extracts X X X X X X X X Extracts X X X X
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