Karnataka High Court
K.L. Sreenivasulu vs Commissioner Of Income-Tax, Karnataka ... on 14 November, 1980
Equivalent citations: (1981)20CTR(KAR)344, [1981]127ITR834(KAR), [1981]127ITR834(KARN), [1981]5TAXMAN306(KAR)
JUDGMENT Srinivasa Iyengar, J.
1. In the these write petitions, the petitioner has challenged a part of the common order made by the Commissioner of Income-Tax on the applications that had been filed by the petitioner for relief under s. 1968-69, 1970-71 to 1973-74 and 1976-77 (six years in all). The assessee by his applications prayed for the waiver of penalty under ss. 271(1)(a), 273(b) and interest under s. 139(8) and under s. 217 of the I.T. Act, 1961. The commissioner waived the penalties as also the interest leviable under s. 139(8) of the I.T. Act but refused to waive the interest payable under s. 217 of the I.T. Act. It is contended by the learned advocate appearing for the petitioner that the given by the commissioner for refusing to waive the interest payable under s. 217 of the I.T. Act is untenable and that part has not been made in the due exercise of the jurisdiction under s. 273A of the I.T. Act.
2. The order of the commissioner consists of only two paragraph and the relevant portion is to be found in para. 2, which is as follows :
"I am satisfied that the conditions stipulated u/s. 273A(1) are satisfied. I, therefore, waive the penalties leviable u/s. 271(1)(a) and u/s. 273(b) and also interest levied u/s. 139(8) for all the above asst. years. As far as the interest levied u/s. 217, there is no need to interfere as the advance tax payable under the Act had been retained by the petitioner and he had the user of the money during the period. The collection of interest thereon is reasonable and, therefore, this interest is retained."
3. Considering the facts and circumstances in the instant cases, the contention put forth by the petitioner is sound. The commissioner waived the penalty imposable under s. 273(b) after holding that the requirements of s. 273A had been satisfied. That was the penalty imposable where the assessee had without reasonable cause failed to furnish an estimate of the advance tax payable by him in accordance with the provisions of the Act the interest under s. 217 is chargeable when on regular assessment the ITO finds that the assessee had failed to file the estimate regarding the advance tax. The interest has to be charged from the first day of April next following the financial year in which the advance tax is payable up to the date of regular assessment. The exercise of jurisdiction under s. 273A is in the light of the fact that interest under s. 217 was payable the assessee. The question of waiver has to be considered notwithstanding the fact that the assessee was liable to pay the interest and had not paid it. The mere fact that the assessee had failed to file the estimate and thereby become liable to be charged with the interest and he had not paid the interest would not by itself be a ground for refusing to exercise the jurisdiction to waive the interest under s. 217 of the I.T. Act. The question of waiver has to be considered notwithstanding the fact that there was a default in this behalf by the assessee. The reason given by the commissioner to refuse to waive the interest under s. 217 was that the advance tax payable had not been paid and the assessee had the use of that amount. As pointed out above, that cannot be a reason to refuse to waive the interest payable under s. 217 and the commissioner in this behalf is untenable. A direction shall accordingly be issued to the commissioner to make a fresh order to the waiver of interest under s. 217 in the light of the observation made above and in accordance with law.
4. The learned counsel appearing for the respondent, however, contended that the direction should be to reconsider the entire order made by the Commissioner. I do not find any in this contention. The Commissioner himself treated each one the items in regard to waiver prayed for as separate and so far as the matter has been favourable to the assessee it has become final and could not be resopened by the Commissioner. Therefore, the contention put forth by the learned counsel appearing for the respondent in this behalf is rejected. The rule is made absolute.