9911796707
TMI Blog2000 (11) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... s, New Delhi. By making all efforts, the petitioner-company completed the payment of the demand of Rs. 69 lakhs by May, 1980, i.e., 16 months ahead of the instalment schedule. Thus being forced to resort to payment of the tax by instalments, the petitioner-company incurred liability towards interest of Rs. 22,23,941 for delayed payment of the income-tax under section 220(2) of the Income-tax Act read with section 6 of the Voluntary Disclosure Act, 1976. On October 26, 1984, the petitioner-company applied to the Central Board of Direct Taxes for waiver or reduction of the said interest under section 220(2A) of the Income-tax Act, 1961. In the meanwhile, the power to reduce or waive as contemplated was vested with the Commissioner of Income-tax by the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986, with effect from April 1, 1987. Ultimately, by the impugned order, the first respondent has rejected their application for waiver of interest, against which, the petitioner-company has filed the present writ petition. It is further stated that the petitioner-company had acted in good faith and after discussion with the income-tax authorities made a declaration under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lments from the Central Board of Direct Taxes, the petitioner-company is estopped from making a claim for waiver of interest. Inasmuch as section 220(2A) of the Income-tax Act, which was introduced in 1984, it has no application to the Voluntary Disclosure Act, 1976. There is no provision under the Voluntary Disclosure Act, 1976, for the reduction of interest. Further, the conditions on the fulfilment of which the interest can be waived under section 220(2A) of the Income-tax Act, 1961, are not applicable to the voluntary disclosure of income. No material was produced before the Commissioner of Income-tax to justify the claim that the payment of interest would cause genuine hardship to the petitioner-company. There is no case for interference in favour of the petitioner under article 226 of the Constitution of India. In the light of the above pleadings, I have heard Mr. V. Ramachandran, learned counsel for the petitioner-company, and Mr. C. V. Rajan, standing counsel for income-tax cases. The only point for consideration is whether the first respondent is justified in rejecting the application of the petitioner-company, filed under section 220(2A) of the Income-tax Act, 1961, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... When the said application was pending, the Income-tax Act was amended vesting the powers under section 220(2A) of the Income-tax Act, 1961, with the Commissioner of Income-tax, and, accordingly, the application for waiver was heard by the first respondent herein. I have already referred to section 6 of the Voluntary Disclosure Act, 1976. The perusal of the said provision clearly shows that for belated payment of income-tax payable in respect of voluntarily disclosed income, levy of interest is a mandatory one. Mr. V. Ramachandran, learned senior counsel for the petitioner-company, after referring to section 220(2A) of the Income-tax Act, 1961, would contend that inasmuch as it is a beneficial provision, the request of the petitioner-company could have been considered. There is no dispute that the Voluntary Disclosure Act, 1976, was enacted in 1976 and section 220(2A) was introduced in the Income-tax Act, 1961, by the Taxation Laws (Amendment) Act, 1984, with effect from October 1, 1984. As rightly contended on the side of the Revenue, the Voluntary Disclosure Act, 1976, was in operation for a limited period of time and was also A self-contained one and there is no provision for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... co-operated with the Department by coming forward with the declaration under the Voluntary Disclosure Act, 1976, and by remitting the sum of Rs. 69 lakhs well ahead of the time granted by the Central Board of Direct Taxes and, accordingly, the payment of interest of Rs. 22,23,941 would cause genuine hardship to them, which deserves liberal treatment and merits the favour of waiver. Though it is stated that the petitioner-company's attitude was one of co-operation relating to assessment proceedings there is no dispute that when the appeals were pending before the Income-tax Appellate Tribunal the petitioner-assessee requested for setting aside the assessments as they desired to avail of the benefits of the Voluntary Disclosure Act, 1976. Though the first respondent-Commissioner has observed that because the petitioner company has filed appeals, I am of the view that filing of appeal on the basis of statutory provision cannot be treated as non-co-operation by the assessee. However, as rightly observed by the first respondent, the petitioner-company has not at all explained the circumstances by which the payment of income-tax on the entire amount disclosed was not made along with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to N. Subhakaran v. CIT [1992] 198 ITR 720 (Ker), would contend that when the impugned order does not disclose all the relevant details, the same cannot be cured by furnishing those materials in the counter affidavit. There is no dispute with regard to the abovesaid proposition, namely, that the defect in the impugned order cannot be cured by filing affidavit. In our case, I have already referred to the reasons furnished by the first respondent in rejecting the claim of the petitioner-company. As a matter of fact, the petitioner-company has not satisfied nor furnished any material to fulfil the three clauses in section 220(2A) of the Income-tax Act, 1961. The other decision referred to by learned senior counsel for the petitioner company is reported in P. Ramasamy v. CIT [1999] 237 ITR 169 (Mad). K. Sampath J., while considering section 220(2A) of the Income-tax Act, 1961, has held that the power to waive interest under section 220(2A) is a "discretionary power" and while exercising such power, the authorities are duty bound to indicate in their order that they had applied their mind in that regard. Here again, there is no dispute with regard to the said proposition. In our case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d failed to comply with the law would still be eligible for relief. It was not an amendment which was intended to extend the power to grant relief in respect of a period during which the authority did not have the power to waive recovery of interest. It is, therefore, not possible to agree with the submission of counsel that the provision is retroactive. The normal rule of construction of any statutory provision is that its operation is prospective. It is only in case of procedural provisions that in the absence of any intention to the contrary whether explicit or implicit, such procedural provisions are regarded as being applicable to pending proceedings, even though such proceedings may have commenced at a point of time anterior to the introduction of the relevant statutory provisions. Where the statute confers a substantive power for the first time, it cannot be held on any known principle of construction of statute that such power is meant to be exercised in respect of past periods as well, so as to undo what had been properly done, and confer a benefit which the plain words of the statute did not intend. It has always been the normal legislative practice to take explicit the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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