Patna High Court
Commissioner Of Income-Tax vs Shree Laxmi Trading Co. on 20 February, 1986
Equivalent citations: [1986]160ITR697(PATNA)
JUDGMENT
1. The Tribunal has referred the following question for our opinion under Section 256(1) of the Income-tax Act, 1961 :
"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal were correct in law in cancelling the interest charged under Section 139(1) by taking recourse to Section 154 by holding that it is not a case of mistake apparent from the record ? "
2. In this reference, we are concerned with the assessment year 1964-65. The assessee was assessed for the said assessment year, but no order was passed in respect of charging of interest. In fact, the Income-tax Officer never adverted to this aspect of the matter. Later, the Income-tax Officer took steps under Section 154 of the Income-tax Act to rectify the error committed by him. After notice to the assessee, the Income-tax Officer assessed interest payable by the assessee at Rs. 1,352 and ordered payment of interest accordingly. The assessee appealed to the Appellate Assistant Commissioner and challenged the jurisdiction of the Income-tax Officer to take recourse to Section 154 of the Act. The stand of the assessee was that the Income-tax Officer must be deemed to have waived charging of interest. The submission of the assessee carried weight before the Appellate Assistant Commissioner. The appeal was allowed and the order of rectification was cancelled. The Revenue being aggrieved by the order of the Appellate Assistant Commissioner filed an appeal before the Appellate Tribunal which affirmed the order of the Appellate Assistant Commissioner. Hence, the present reference before us.
3. Learned senior standing counsel for the Revenue has submitted that the Appellate Assistant Commissioner and the Tribunal erred in law in holding that the Income-tax Officer must be held to have waived charging of interest. Our attention was drawn to Rule 117A of the Income-tax Rules, 1962, which reads as follows :
" 117A. Reduction or waiver of interest payable under Section 139. ---The Income-tax Officer may reduce or waive the interest payable under Section 1 39 in the cases and in the circumstances mentioned below, namely:--
(i) where the return of income is furnished by a person who has been treated under Section 163 as an agent of a non-resident and is assessed in respect of the latter's income ;
(ii) where the return of income is furnished by an assessee whose only source of income during the relevant previous year is a share in the income of an unregistered firm which has been assessed on its total income in respect of that previous year under Clause (b) of Section 183 ;
(iii) where the return of income of a deceased individual is furnished by his legal representative and the legal representative satisfies the Income-tax Officer that he had sufficient cause for not furnishing such return within time;
(iv) where the return of income has been furnished in pursuance of a notice issued under Section 148;
(v) any case in which the assessee produces evidence to the satisfaction of the Income-tax Officer that he was prevented by sufficient cause from furnishing the return within time :
Provided that the previous approval of the Inspecting Assistant Commissioner has been obtained where the amount of interest reduced or waived, as the case may be, under Clause (iv) or Clause (v) exceeds one thousand rupees. "
4. Learned senior standing counsel has contended that the sum payable as interest being above one thousand rupees, the Income-tax Officer has no jurisdiction to waive the interest without the approval of the Inspecting Assistant Commissioner. In this case, it is not in controversy that the approval of the Inspecting Assistant Commissioner had not been obtained. Upon those facts, the submission urged on behalf of the Revenue is well-founded and must be sustained.
5. Waiver is a conscious act. It is not non-application of mind. Even if it were to be taken as implied, the presumption cannot be raised against the statute. The rules which are statutory clearly prohibit waiving of charging of interest without approval of the Inspecting Assistant Commissioner. In that view of the matter, the Income-tax Officer not having the jurisdiction to waive, he cannot be deemed to have waived it. The very same question came up for consideration before us in Taxation Case No. 231 of 1976 (CIT v. Ashok Trading Co. [1986] 160 ITR 663) disposed of on November 9, 1985. In that case, we held that where the sum chargeable as interest is above one thousond rupees, waiver cannot be implied unless the waiver had been approved by the Inspecting Assistant Commissioner. In that view of the matter, the proceedings initiated for rectification of the assessment of the assessee was correct. The Tribunal was, therefore, in our view, not correct in cancelling the interest charged under Section 139 by taking recourse to Section 154 upholding that there was no mistake apparent from the record.
6. The reference is thus answered in favour of the Revenue and against the assessee. There shall be no order as to costs.