9911796707
TMI Blog2017 (11) TMI 1225X X X X Extracts X X X X X X X X Extracts X X X X ..... ter setting off of the carried forward loss amounting to Rs. 32,14,404/-. 4.The Government of Tamil Nadu enacted The Madras Race Club (Acquisition and Transfer of undertaking) Act, 26 of 1986 [hereinafter referred to as Acquisition Act ], to provide for the acquisition, for a public purpose, and transfer of undertaking of the petitioner and for matters connected therewith or incidental thereto. In terms of Section 4 of the Acquisition Act, on the appointed date, i.e. 09.04.1986, the undertaking of the petitioner Club and the right, title and interest of the Club in relation to its undertaking shall, by virtue of the Acquisition Act, stood transferred to, and vested in, the Government. In terms of Section 3(e) of the Acquisition Act, Government means the State Government and Section 3(f) defines Government Company to mean a Corporation or a Company wholly owned by the State. The payments to be made, were effected by a Commissioner appointed by the Government in terms of Section 14 of the Acquisition Act. Every person having a claim against the petitioner with regard to any of the matters specified in Second Schedule to the Act pertaining to the undertaking shall prefer a claim befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ried forward loss for the assessment year 1984-1985 which was determined at Rs. 35,433/- was re-determined by the Assessing Officer, by order dated 31.10.1996 as Rs. 11.92 lakhs. Once again, the Assessing Officer exercised his powers under Section 154 and passed a rectification order dated 25.08.2003 for assessment year 1984-1985 arrived at the carried forward business loss at Rs. 12.82 lakhs as against the earlier determination of Rs. 11.92 lakhs. This rectified order dated 25.08.2003 was given effect to by way of revision of assessment under Section 154, by order dated 29.08.2003 allowing a carried forward loss of Rs. 12.82 lakhs for the assessment year 1984-1985 and arrived at the total income of Rs. 26,88,790/- after adjustment for tax arrived at NIL tax payable. By separate order dated 29.08.2003, interest was demanded at Rs. 24.65 lakhs. 6.As noticed above, from 09.04.1986 to 22.03.1996, the affairs of the Club vested with the Government and however, during the said period the subscription from the members alone was collected that being their only meagre income. Thus, it could be seen that the assessment for the year 1985-1986 where the petitioner carried forward the loss fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 244(1A), being a substantial amount, the petitioner cannot claim any hardship; (ii) for being entitled for waiver of interest under Section 220(2), three Conditions have to be satisfied cumulatively and the petitioner has not satisfying Condition Nos.(i) and (ii) regarding genuine hardship and circumstances beyond their control. Therefore, the petitioner is not entitled for waiver of interest; (iii) the petitioner could have paid advance tax or self assessment tax much before the takeover of the Club on 10.04.1986 and the liability could have been easily settled and that question of 'waiver of interest' will not arise. 10.The correctness of this reasons is being tested in this writ petition. 11.Heard Mr.M.P.Senthilumar, learned counsel for the petitioner and Mr.Naveen Durai Babu, learned Junior standing counsel for the respondents and carefully perused the materials placed on record. 12.The assessee to be entitled for waiver of interest under Section 220(2A) has to establish to the satisfaction of the CIT, the following conditions: "(i) payment of such amount has caused or would genuine hardship to the assessee; (ii) default in the payment of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e II to the Acquisition Act and the last among the priority of debts as stipulated under Section 18 of the Acquisition Act. The Assessing Officer as well as the Department was well aware with the said provision and this presumption can safely be drawn on account of the conduct of the Department in not enforcing any of the demands issued and for the first time interest demand was issued on 12.12.2000 much after the Club was handed over to the Committee of Management. 15.One more important fact to be seen in the instant case is the assessment for the year 1985-1986 in which the petitioner claimed a carried forward loss for the assessment year 1984-1985 was finalised only on 25.08.2003. The Assessing Officer suo motu rectified the order for the year 1984-1985 with regard to the carried forward business loss and this rectified order was implemented and revision of assessment was made for the assessment year 1985-1986 on 29.08.2003. Thus, from 1985 onwards till 2003 the assessment was not completed. As noticed above, there were three computations with regard to carry forward loss. The petitioner cannot be stated to be wholly incorrect for claiming a carry forward loss, while they filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Department had no priority over their claims and they were the last among the list of priorities, the respondent Department did not challenge the provisions of the Acquisition Act. Therefore, to now pin down the petitioner/assessee and direct them to pay interest will be harsh especially when the circumstances stated above clearly shows that they were beyond the control of the petitioner. 18.The learned counsel for the Revenue relied on the decision of the High Court of Delhi in the case of Girnar Investment Limited V. Commissioner of Income Tax, [2012] 17 taxmann.com 69 (Delhi). Firstly, the said case is clearly distinguishable facts as the assessee therein contended that the demand for interest should not be made from the date on which the assessee had committed default in payment but should be fixed after taking note of the orders passed by the Appellate Authority as well as the Tribunal. This contention was rejected and the Hon'ble Division Bench ruled in favour of the Revenue holding that even if the assessment is restored and original demand gets revived from the inception, the assessee is liable to pay interest under Section 220(2) from the date on unpaid amount and ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
