IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 11.9.2008 CORAM THE HON'BLE MR.JUSTICE M.JAICHANDREN W.P.Nos.2660 and 2661 of 2001 S.M.Shamsudeen .. Petitioner in both the writ petitions vs. The Chief Commissioner of Income Tax II 121 Mahathma Gandhi Road Chennai-34 .. Respondent in both the writ petitions W.P.No.2660 of 2001: This writ petition is filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorarified Mandamus to call for the proceedings of the respondent in C II/B(143)/1999-2000 quash the order dated 28.9.2000 in relating to the assessment year 1989-90 and consequently direct the respondent to waive or reduce the interest levied under Section 234 A and 234 B of the Income Tax Act for the assessment years. W.P.No.2661 of 2001: This writ petition is filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorarified Mandamus to call for the proceedings of the respondent in C II/B(143)/1999-2000 quash the order dated 28.9.2000 in relating to the assessment year 1990-91 and consequently direct the respondent to waive or reduce the interest levied under Section 234 A and 234 B of the Income Tax Act for the assessment years. For petitioner : Mr.C.V.Rajan For Respondent : Mr.M.Muralikumaran O R D E R
Heard the learned counsel appearing for the parties concerned.
2. Since the issues involved in the above writ petitions have arisen out of the same facts and circumstances, a common order is passed.
3. The facts, in a nutshell, are as follows:
It has been stated that the petitioner is an individual assessed to Income Tax on the file of the Income Tax Officer, Ward I(2), Kumbakonam, in G.I.No.1810 S. The relevant assessment years are 1989-90 and 1990-91, ending on 31.3.1989 and 31.3.1990, respectively.
4. It has been further stated that for the assessment years 1989-90 and 1990-91, the petitioner had not filed the returns within the due dates, under Section 139(1) of the Income Tax Act. Hence, a notice, under Section 142(1) of the Income Tax Act, had been issued, on 7.1.1991, directing the petitioner to file the return, on or before 31.1.1991. Pursuant to the said notice, the petitioner had issued a letter, dated 24.9.1991, to the assessing officer stating that the petitioner could not file the returns for both the assessment years due to compelling family circumstances which were beyond his control. It was stated that the petitioner’s abnormal mental and physical condition was due to the severe heart problem suffered by one of his brothers, who had later died and the death of his parents. He had also stated that the office and the records therein had been destroyed due to a fire accident. Further, the petitioner’s building as well as his vehicle (van) had been destroyed due to political enmity. While so, the assessing officer had completed the assessments, on 3.1.1992, under Section 144 of the Income Tax Act and the following demands were raised.
1989-90
1990-91
Total income determined (finally after appellate order)
Rs
2,12,000
1,81,936
Income Tax
. 93,812
1,02,220
Interest under Section 234 A
. 54,404
. 34,748
Interest under Section 234 B
. 63,784
. 44,968
Interest u/s.220(2) (as per order dated 11.8.99)
1,55,130
1,36,068
5. While completing the assessment, the assessment officer had levied the penal interest, under Section 234 A and 234 B. Later, the petitioner had filed a waiver petition before the respondent contending that the returns for 1989-90 and 1990-91, due to be filed by 31.8.1989 and 31.8.1990, respectively, could not be filed due to various reasons. It has been stated that notices, under Section 142(1) were issued for 1989-90 and 1990-91, on 7.1.1991. The assessing officer had completed the assessment, under Section 144 of the Income Tax Act, for the years 1989-90 and 1990-91, on 3.1.1992 i.e., after a delay of 28 months and 12 months, respectively, from the dates when the time, under Section 139(1) for filing the returns, had expired.
6. It has also been stated that if the assessment for the years 1989-90 and 1990-91 had been completed, under Section 144 (1), in time, the petitioner would not have been liable for payment of a huge amount as interest. The inordinate delay in completing the assessments for the said years, under Section 144 of the Income Tax Act, was not attributable due to any default on the part of the petitioner. Therefore, the petitioner had requested the respondent to waive the interest levied, under Section 234 A and 234 B of the Income Tax. However, the respondent by his order, dated 28.9.2000, in C.II/B(143)/1999-2000, had dismissed the waiver petition on the ground that the petitioner’s case does not fall under any of the criteria (a) to (d) enumerated in the Board’s Circular, dated 23.5.1996, and there was no merit in the petition.
7. Thus, the respondent had dismissed the waiver petition filed by the petitioner, without properly assessing the reasons for non filing of the returns in time. The respondent had dismissed the waiver petition merely on the ground that no details had been given. No materials were produced to substantiate the claims made by the petitioner. The respondent would have given an opportunity to the petitioner to produce the necessary records to show that there was sufficient reasons for the non-filing of the returns in time. In such circumstances, the petitioner has filed the present writ petitions, praying for the reliefs as stated therein.
8. At the stage of the hearing of the writ petitions, the learned counsel appearing for the petitioner had submitted that it would suffice if this Court is pleased to set aside the proceedings of the respondent in C. II/B(143)/1999-2000, dated 28.9.2000, relating to the assessment years 1989-90 and 1990-91 and if the petitioner is permitted to submit all the relevant records before the respondent to show that there were sufficient reasons for the failure of the petitioner to submit the returns for the years 1989-90 and 1990-91, within the time limit prescribed and if this Court directs the respondent to consider the request of the petitioner for waiver of penal interest levied, under Section 234 A and 234 B of the Income Tax Act.
9. The learned counsel appearing for the respondent had no serious objections for this Court passing such an order.
10. In view of the reasons stated in the affidavit filed in support of the petitions and considering the submissions made by the learned counsels appearing for the parties concerned, the impugned proceedings of the respondent, in C.II/B(143)/1999-2000, dated 28.9.2000, relating to the assessment years 1989-90 and 1990-91, is set aside. However, the petitioner shall submit all the relevant records in support of his claims, necessary for the respondent to assess as to whether there were valid reasons to entertain the request of the petitioner for waiver of the interest charged, under Sections 234 A and 234 B for the assessment years 1989-90 and 1990-91, within a period of four weeks from the date of receipt of a copy of this order. On the petitioner submitting the necessary records, as stated above, the respondent is to assess the same, with regard to the request of the petitioner, for waiver of interest charged under Sections 234 A and 234 B of the Income Tax Act, 1961, and to pass appropriate orders thereon, within a period of eight weeks thereafter.
The writ petitions stand disposed of. No costs.
11.9.2008 INDEX : YES INTERNET : YES M.JAICHANDREN J., lan To: The Chief Commissioner of Income Tax II 121 Mahathma Gandhi Road Chennai-34 W.P.Nos.2660 and 2661 of 2001 11.9.2008