Madras High Court
Sridevi Venkataswamy vs The Chief Commissioner Of Income Tax on 4 August, 2010
Author: N.Paul Vasanthakumar
Bench: N.Paul Vasanthakumar
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 4-8-2010 CORAM THE HONOURABLE MR.JUSTICE N.PAUL VASANTHAKUMAR W.P.Nos.5261, 5262, 5263, 5264 of 2006 WPMP.Nos.5629,5630,5631,5632,5634,5635,5637,5638 of 2006 Sridevi Venkataswamy ... Petitioner in all petitions Vs 1. The Chief Commissioner of Income Tax, 63, Race Course Road, Coimbatore. 2. Deputy Commissioner of Income Tax, Company Circle II(2), 53, Race Course Road, Coimbatore. 3. Assistant Commissioner of Income Tax, Company Circle-II (2), 53, Race Course Road, Coimbatore. ... Respondents in all petitions PRAYER in all writ petitions : This writ petition is filed under Article 226 of the Constitution of India with a prayer to issue a writ of certiorarified mandamus calling for the records in C.No.1433(81)/2002-03/Cbe, dated 9.11.2005 passed by the first respondent and quash the same and further direct the first respondent to waive the excessive interest levied under Section 234A, 234B and 234C. For Petitioner : Mr.T.C.A.Ramanujam For Respondents : Mr.J. Nareshkumar COMMON ORDER
The prayer in these writ petitions are to quash the proceedings dated 9.11.2005 of the first respondent and direct the first respondent to waive the excessive interest levied under Sections 234A, 234B and 234C of the Income Tax Act, 1961.
2. All the writ petitions are filed by the very same petitioner, who is a widow of one Venkataswamy, who was Director of M/s.Venkatesa Spinners Private Limited. Petitioner's husband and other Directors looked after the day-to-day affairs of the said Company. Petitioner was housewife. Petitioner's husband died on 28.3.1991 leaving behind the petitioner and a minor daughter. Petitioner became one of the Directors of the said Spinners Limited after the demise of her husband. According to the petitioner, she had no knowledge about the Company affairs and Income-tax matters.
3. On 1.4.1996 M/s.Venkatesa Spinners Private Limited demerged, after which the petitioner seized to be the Director of the said Company. Till 1.4.1996, petitioner was deriving income by way of salary from the said Spinners Limited, dividend, interest and rent. Her daughter also derived income by way of interest on investments. Petitioner as well as her daughter were assessed to income tax separately by giving separate PAN numbers for all these years. They have paid advance tax and suffered deductions at source. After the demerger of Sri Venkatesa Spinners Limited, in the year 1996 the petitioner started a Mill of her own for her earnings viz., M/s.Prachidi Spinners Limited. Due to lack of knowledge about tax laws, petitioner could not file returns on income for the assessment years 1993-94, 1994-95, 1995-96 and 1996-97 on time. However, advance tax was paid for all the years for her and on behalf of her minor daughter without any delay or default.
4. As the petitioner was new to the Company affairs after the demise of her husband, she could not file the income-tax returns for the above said assessment years in time and therefore there was delay, though advance taxes were paid without any delay. Petitioner was also not aware of the change of Income-tax laws and she came to know about the changes in the law during 1996-97 and immediately after knowing the correct position of law, she included the income of her minor daughter and paid the excess tax without concealing anything. The petitioner calculated her minor daughter's income of Rs.2,85,799/-; Rs.3,47,885/-; Rs.4,74,023; and Rs.2,42,424/- and added the same in her returns while she filed her returns of income for the said years and paid excess tax. The said amounts were paid voluntarily without any demand from the Income Tax Department. The returns were filed on 31.10.1997 for the assessment years 1993-94 and 1994-95, and on 6.3.1998 for the assessment years 1995-96 and 1996-97. The department issued notice under Section 148 of the Income Tax Act, 1961, to regularise the returns.
5. The Assessing Officer accepted the returns for all the years and processed the same under Section 143(1)(a) of the Income Tax Act, 1961, however, charged interest under sections 234A, 234B and 234C on the returned income for all four years as follows:
Year Date of intimation u/s.143 (1)(a) Sec.
234A Sec.
234B Sec.
234C Total 1993-94 8/9/99 94,229/-
1,04,102/-
5,838/-
2,04,169/-
1994-95 8/9/99 72,418/-
84,708/-
6,644/-
1,63,770/-
1995-96 1/11/00 49,745/-
61,112/-
5,083/-
1,15,940/-
1996-97 11/2/99 9,589/-
12,984/-
4,640/-
27,213/-
The petitioner being aggrieved towards the charge of interest for submitting the belated returns, filed an application for waiver on 5.1.2001 and claimed relief under Notification No.F.No.400/234/95-II(B), dated 23.5.1996. The said petition was rejected by the order of the first respondent dated 9.11.2005 and therefore the same is challenged in these writ petitions by contending that the said notification dated 23.5.1996 has not been applied properly in the petitioner's case and waiver of interest ought to have been granted.
6. The learned counsel for the petitioner submitted that when similar interest was claimed against the petitioner's minor daughter for the years 1991-92, 1992-93, she approached this Court and her claim was sustained by this Court in the judgment reported in 2009 (318) ITR 1 (Mad) (V. Akilandeswari v. Chief Commissioner of Income-tax). The learned counsel submitted that in the said judgment the learned single Judge followed the Division Bench judgments reported in 2008 (296) ITR 63 (Mad) (Kanchipuram Silk Handloom Weavers Co-Operative Marketing Society Ltd. Vs. CIT); 2008 (299) ITR 456 (Mad) (Ganesan (M) Vs. Vice Chairman, Settlement Commission (IT and WT) and other judgments and set aside the order rejecting waiver of interest.
7. The learned counsel for the respondents accept that insofar as the minor daughter of the petitioner this Court granted relief. The relevant clause in circular dated 23.5.1996 reads as follows:
"(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. 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 his order with reference to the assessment year 1989-90 or any subsequent assessment year ....."
The Division Bench of this Court in T.N.Arumugam's case, (2009) 308 ITR 216 allowed a writ petition on the ground that the Commissioner did not consider the circumstances under which an assessee was unable to pay the tax earlier and the order passed by the Chief Commissioner was bereft of reason. In 2009 (318) ITR 1 (Mad) (V. Akilandeswari v. Chief Commissioner of Income-tax) this Court held as follows:
"Applying the ratio of this Court noted above, it is seen in the present case that the petitioner has paid the tax voluntarily and has also pleaded a good and sufficient reason for the non-payment of tax on time. The fact of the death of petitioner's father who was looking after the business, and as well as the petitioner's mother and guardian was a housewife unfamiliar with such transactions, is not denied by the respondent. On the contrary, he has given some logical interpretation for overruling the claim made by the petitioner. In the present case, the entire tax amount for the years 1991-92 and 1992-93 have been paid by the petitioner. She has also paid some extra amount. The claim made by the petitioner is bona fide and genuine and the respondent has not exercised his discretion in terms of law. In the light of the above, the writ petitions will stand allowed and the impugned order insofar as levying interest under Section 234A, 234B and 234C is set aside and it is declared that the petitioner need not pay any interest for those two assessment years. At the same time, if any excess amount had been paid, she is also not entitled to seek refund of the same."
8. The only difference in these cases and the above referred case is that the petitioner herein is the widow of the Director, who passed away on 28.3.1991 and the judgment cited above was in the petition filed by the minor daughter of the said Director. Therefore the reasonings given by the learned Judge in allowing the said writ petition as stated supra will apply with equal force to the facts in these cases. Consequently I hold that the petitioner is entitled to succeed in these writ petitions based on the above judgment.
9. The writ petitions are allowed in terms of the decision reported in 2009 (318) ITR 1 (Mad) (V. Akilandeswari v. Chief Commissioner of Income-tax) and if any amount is paid by the petitioner pursuant to the impugned order, she is not entitled to seek refund of the same. No costs. Connected miscellaneous petitions are closed.
Index : Yes/No.
Website : Yes/No. 4-8-2010
vr
To
1. The Chief Commissioner of Income Tax,
63, Race Course Road, Coimbatore.
2. The Deputy Commissioner of Income Tax,
Company Circle II(2), 53, Race Course Road,
Coimbatore.
3. The Assistant Commissioner of Income Tax,
Company Circle-II (2), 53, Race Course Road,
Coimbatore.
N.PAUL VASANTHAKUMAR,J.
vr
Pre-Delivery Order in
W.P.Nos.5261 to 5264/2006
4-8-2010