Kerala High Court
Eminent Enterprises vs Commissioner Of Income-Tax And Ors. on 12 January, 1999
Equivalent citations: [1999]236ITR883(KER)
JUDGMENT P. Shanmugam, J.
1. The petitioner is a registered partnership firm. The challenge is against exhibits P-7 and P-4 orders passed under Section 220(2A) of the Income-tax Act, 1961 (hereinafter referred to as "the Act").
2. As against exhibit P-1 assessment order determining the tax of Rs. 14,445, the petitioner has preferred an application, exhibit P-2, dated April 11, 1983, under Section 154 of the Act for rectification. In that it is stated that a sum of Rs. 9,763 is levied as interest under Section 139(8) of the Act and in computing the interest, it appears that an amount of Rs. 6,088 paid as advance tax has not been given credit for. By exhibit P-4 proceedings the Income-tax Officer found that the tax paid on June 15, 1979, qualified as advance tax for the year 1980-81 and, therefore, the petition for rectification was considered on the merits and the modified order was passed. In this under Section 220(2) of the Act the interest of Rs. 10,337 for the period from May 1, 1983, to August 31, 1993, was demanded. As against this the petitioner preferred a revision before the Commissioner of Income-tax which was dismissed by exhibit P-7 order. Hence, this O. P.
3. In support of the application for waiver the petitioner has simply stated that they were not doing any business and hence there was considerable difficulty in paying the amount. The Commissioner in exhibit P-7 order found that there is nothing to show that the petitioner was in financial difficulties or that further payment by way of interest would cause genuine hardship to him. I do not find any illegality in the said finding since the petitioner has not established his genuine hardship as required under Sub-section (2A) of Section 220 of the Act. Three conditions are to be satisfied cumulatively for an order under Section 220(2A). Therefore, inasmuch as the petitioner has not satisfied the first condition to the satisfaction of the Commissioner the petitioner is not eligible for waiver of interest. From the records it could be seen that as per exhibit P-4 interest is claimed only for the tax payable, viz., Rs. 2,139 from 1983 to 1993.
4. In the application for waiver, exhibit P-2, it is specifically stated that they have filed the return on July 27, 1981. The assessment was completed only by order dated March 15, 1988. By virtue of rule 40 of the Income-tax Rules, the assessment had not been completed within the period of one year and the delay being not attributable to the assessee they are right in claiming for waiver of interest under Section 217 of the Act. As this was not conceded in the memorandum of his revision application also the relief was claimed. It is now submitted that as against the order refusing to grant the relief under Section 217 of the Act an appeal has to be preferred. It is too hard to drive the petitioner to an appeal at this stage. In the above circumstances the claim in so far as Section 217 waiver of interest is concerned is sustained. The Income-tax Officer is directed to pass fresh orders only in so far as the request of the petitioner relating to Section 217 of the Act is concerned. In all other respects exhibits P-4 and P-7 orders are confirmed. The original petition is allowed in part.