Anto Nitto vs Commissioner of Income Tax and Another

Antony Dominic, J.—Heard the learned counsel for the petitioner and the learned counsel for the respondents. The petitioner challenges exhibit P3, an order passed by the first respondent on an application made by the petitioner for waiver of interest as provided u/s 220(2A) of the income tax Act, 1961. It is seen that by exhibit P2 application made by the petitioner for waiver, he requested the respondents to waive the interest liability of Rs. 8,54,476. That application is seen rejected by exhibit P3 order. It is also seen from the pleadings that subsequently, the whole interest liability of the petitioner was satisfied by appropriating the amounts from out of Rs. 18,06,402 remitted by the Corporation of Cochin which was due to the petitioner in a land acquisition proceedings.

In exhibit P3, mainly two reasons are stated. The first reason stated for rejection of the petitioner''s application is that the petitioner did not produce any proof that he had no other business or source of income. It is also stated that there has not been any co-operation extended to the Department during the recovery proceedings.

In so far as the absence of any other business or source of income is concerned, first of all, the respondents themselves have no case that the petitioner had any other business or source of income. It is also the admitted case of the respondents that the entire properties of the petitioner are under attachment and that the interest liability of the petitioner was satisfied from out of the compensation amount remitted by the Corporation of Cochin. These facts, in my view, prima facie substantiate the case of the petitioner that he had no business or source of income and that payment of interest as demanded, would cause genuine hardship.

Finding of non-co-operation on the part of the petitioner is basically on the ground that the petitioner, as legal heir of K.J. Columbus and representing the firm, M/s. Ocean Fisheries, committed default in complying with the conditional waiver order and the instalment facility. The fact that these orders were not complied with, according to the petitioner, was for the reason that he had no source of money to comply with the same. In other words, his case is that there has not been any wilful default. This contention again, is at least, prima facie, proved by the fact that the entire properties of the petitioner was under attachment and that the entire liabilities were subsequently cleared by making appropriation of the compensation amount. Therefore, I am unable to uphold both the grounds relied on in exhibit P3 against the petitioner.

Learned counsel for the Revenue contended that exhibit P3 order concerns only the interest liability of the petitioner and the fact that the interest liability has now been discharged by appropriating the compensation received from the Corporation of Cochin itself show that there is no genuine hardship. I am unable to agree. The fact that the liability has been discharged by itself will not indicate that there is no hardship. If the entire amount available has been appropriated by the Revenue, that itself can give rise to a case of genuine hardship.

For these reasons, exhibit P3 cannot be sustained and, therefore, is quashed. The first respondent is directed to reconsider the exhibit P2 application made by the petitioner with notice to him and pass fresh orders, in accordance with law. This shall be done within three months of receipt of a copy of this judgment. The writ petition is disposed of.