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TMI Blog2019 (8) TMI 994X X X X Extracts X X X X X X X X Extracts X X X X ..... use for seeking waiver of interest, it would have been expressly stated in clause 2(e) as in clause 2(d). When a person embarks on the journey of litigation, one should always be prepared for an adverse verdict. Therefore, there is nothing unforeseeable about the outcome of judicial or quasi judicial proceeding. As the preambular paragraph of the notification dated 23.05.1996 states, reduction or waiver of penal interest charged under Sections 234 A, 234 B and 234 C can be made only in the classes of cases or classes of income tax specified in paragraph 2 of the order. Unless the case of the assessee can be brought within one of the five clauses, there can be no scope for claiming reduction or waiver. It is not the case of the petitioner that his case will fall under clause 2 (a) or (b) or (c) or (d) of the notification. His case will have to fall only within clause 2(e). That is why, even though the petitioner talks about clause (v) in the earlier part of ground (d) of his affidavit filed in support of the writ petition, he would contend in the very same ground a little later, that he had satisfied the conditions laid under clause (e) of the Board s circular. Rejection of one s st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on 06.03.1992. After so reasoning out, the assessment was completed under Section 143(3) of the Income Tax Act, 1961, on 29.10.1998 by treating the capital gains of ₹ 6,05,000/- as short term capital gains. The claim of the assessee that it was a long term capital gains was rejected. The assessing officer determined the total income at ₹ 17,30,930/- for the said assessment year and demanded a sum of ₹ 5,46,742/- as the total net tax payable. The assessing officer charged interest under Section 234 A of the Act at ₹ 45,108/- and under Section 234 B at ₹ 1,73,766/- and under Section 234 C at ₹ 5,640/-. 3.It is not in dispute that the entire tax as demanded by the assessing officer was paid. The writ petitioner's father thereafter filed a waiver petition under Section 119(2) (a) of the Income Tax Act on 18.08.2000 for waiver of the interest charged under the aforesaid provisions. The stand taken in the said waiver petition was that on 06.03.1992 he purchased an immovable property at Royapettah High Road for ₹ 5,20,000/- vide builders agreement dated 06.03.1992 and that the same was sold vide sale deed dated 14.08.1995 for a sum of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s counsel, the respondent erroneously invoked Clause(e) and that the applicable clause will be clause (v) of the Board's cricular dated 23.05.1996. According to the petitioner, the said clause reads as under : "(v)Where return of income is filed voluntarily without detection by the Income-tax Department and due to circumstances beyond control of the taxpayer such return of income was not filed within the stipulated time-limit or advance tax was not paid at the relevant time." The writ petitioner's father was under a bonafide belief that the transaction is liable only for long term capital gain. However, the assessing officer chose to treat the transaction as a short term capital gain. This according to the petitioner's counsel was beyond the control of the assessee. After the assessing officer made the stand clear, the petitioner's father duly paid the tax. Therefore, the petitioner's counsel contend that the impugned order will have to be set aside and the writ petition allowed. The learned counsel also placed reliance on the following decisions : "1.N.Haridas & Co. vs. Chief Commissioner of Income Tax & Anr (2008) 296 ITR 246 (Mad). 2.Bhanuben Panchal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Board of Direct Taxes hereby direct that the Chief Commissioner of Income-tax and Director-General of Income-tax may reduce or waive interest charged under section 234A or section 234B or section 234C of the Act in the classes of cases or classes of income specified in paragraph 2 of this order for the period and to the extent the Chief Commissioner of Income-tax/Director-General of Income-tax deem fit. However, no reduction or waiver of such interest shall be ordered unless the assessee has filed the return of income for the relevant assessment year and paid the entire tax due on the income as assessed except the amount of interest for which reduction or waiver has been requested for. The Chief Commissioner of Income-tax or the Director-General of Income-tax may also impose any other conditions deemed fit for the said reduction or waiver of interest. 2.The class of incomes or class of cases in which the reduction or waiver of interest under section 234A or section 234B or, as the case may be, section 234C can be considered, are as follows : (a)Where during the course of proceedings for search and seizure under section 132 of the Income-tax Act, or otherwise, the books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Commissioner or Director-General is satisfied that this is a fit case for reduction or waiver of such interest. (e)Where a return of income could not be filed by the assessee due to unavoidable circumstances and such return of income is filed voluntarily by the assessee or his legal heirs without detection by the Assessing Officer. 3.The Chief Commissioner of Income-tax/Director-General of Income-tax may order the waiver or reduction of interest under sections 234A, 234B and 234C under this order with reference to the assessment year 1989-90 or any subsequent assessment year but shall not so reduce or waive penal interest in those cases where waiver or reduction of such interest has been rejected in the past on the merits of the case. If any petition in the past has been rejected because the Board had not issued this direction earlier, these may be reconsidered and decided in accordance with this order. Order : [F. No. 400/234/95-IT(B)], dated 23-5-1996" However, two days prior to the issuance of the notification, a press note was released. The said press note dated 23.05.1996 reads as under : "Prior to 1989, taxpayers who had failed to furnish the return of income within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income was not filed within the stipulated time-limit or advance tax was not paid at the relevant time. 3.The Chief Commissioners and Directors-General are being authorised to reduce or waive penal interest under sections 234A, 234B and 234C with reference to assessment year 1989-90 and any subsequent assessment year subject to certain specified conditions. This is a major step taken by the Central Board of Direct Taxes to mitigate the hardships in deserving cases. Press Note : Dated 21-5-1996." 12.Even this is an official press statement released by the department, the issues will have to be adjudicated only in terms of the formal notification and not in terms of the press release. The case laws referred to by the learned counsel for the petitioner are to the effect that if the assessee can establish that the default or delay in remitting the tax was due to circumstances beyond his control, then the department will have to adopt a liberal approach in granting waiver of interest under the aforesaid provisions. Even though the expression "due to circumstances beyond control of the tax payer" is not found in Clause (e) of the notification dated 23.05.1996, one can assume th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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