Kerala High Court
The Chief Commissioner Of Income Tax vs Dr.K.G.Kumar on 17 December, 2009
Bench: C.N.Ramachandran Nair, V.K.Mohanan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
WA.No. 2462 of 2009()
1. THE CHIEF COMMISSIONER OF INCOME TAX,
... Petitioner
2. THE INCOME TAX OFFICER,
Vs
1. DR.K.G.KUMAR, RESIDING AT 880,
... Respondent
For Petitioner :SRI.JOSE JOSEPH, SC, FOR INCOME TAX
For Respondent : No Appearance
The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice V.K.MOHANAN
Dated :17/12/2009
O R D E R
C .N. RAMACHANDRAN NAIR &
V.K. MOHANAN, JJ.
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W. A. No. 2462 OF 2009
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Dated this the 17th day of December, 2009
JUDGMENT
Ramachandran Nair, J.
Appeal is filed against the judgment of the learned single Judge holding that respondent-assessee who was granted waiver of interest under Section 234A of the I.T. Act by the Chief Commissioner of Income-tax is entitled to waiver of interest payable under Section 234B and 234C as well on the same ground that is clause (e) in Notification No. 400/234/95/IT dated 23.5.1996. We have heard standing counsel appearing for the department and Sri. S. Vijayan Nair, counsel appearing for the respondent-assessee. After hearing both sides, we are unable to uphold the finding of the learned single Judge with regard to entitlement of the respondent-assessee for waiver of interest payable under Section 234B and 234C of the Act, merely because assessee has voluntarily filed returns and paid tax. In our view, clauses (a) and (e) of the Notification deals with the same subject, that is circumstances for waiver of interest under Section 234A. However, for considering 2 waiver of interest under Sections 234B and 234C, application has to be considered with specific reference to clauses (b), (c) and (d) of the Notification. While clause (a) refers to disability of an assessee from filing a return on account of search and seizure and retention of books of accounts, clause (e) deals with other cases where parties were disabled from filing of returns for unavoidable reasons, may be party happens to be out of India, happens to be sick and laid up, etc. However, the finding of the learned single Judge that clause (e) is a condition, satisfaction of which, entitles the assessee to claim waiver of interest under Sections 234B and 234C of the Act, in our view, is not tenable, because it only lays down a condition for waiver of interest under Section 234A of the Act. We therefore allow the appeal by reversing the judgment of the learned single Judge and by holding that satisfaction of the condition under clause (e) does not entitle the assessee for waiver of interest under Section 234B and Section 234C of the Act.
2. Sri. Vijayan Nair, counsel appearing for the respondent- assessee, pointed out the peculiar circumstances in which the assessee 3 was placed and the nature of income on which tax and interest are paid, that too based on returns filed voluntarily by the assessee. Assessee a non resident Indian made payment to a builder for construction of a building for him. However, the builder did not honour the commitment and consequently the assessee had to approach the Consumer Forum which awarded compensation including interest. After several years assessee got a total interest of around Rs. 9.9 lakhs, which was returned by the assessee for the purpose of tax by spreading over the interest for several years reckoned by the Consumer Forum while granting compensation. Department appears to have accepted the spreading over of interest income for several years and completed assessments. In fact it is seen that assessee has along with payment of tax remitted interest under Sections 234A, 234B and 234C of the Act, total of which is around Rs. 2.41 lakhs as against total tax libility of Rs. 1.75 lakhs. Considering the unique features of this case where the default is not attributable to the assessee, though not strictly covered by the circular, in exercise of extra-ordinary powers under Art. 226 of the Constitution of India, we direct the department to limit the interest demand under 4 Sections 234B and 234C to Rs. 50,000/- and grant refund of the excess after rckoning the waiver of Section 234A interest also granted by the Chief Commissioner of Income tax.
W.A. is allowed by reversing impugned judgment and WPC is disposed of granting relief as above.
(C.N.RAMACHANDRAN NAIR) Judge.
(V.K. MOHANAN) Judge.
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