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Judgment
Honourable Mr. Justice Vinod K. Sharma
This order shall dispose of W.P.(MD)Nos. 12354 and 12366 of 2008, as common questions of law, and facts are involved in these cases.
The Petitioner filed two separate applications u/s 119(2)(a) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), read with Sections 234-A, 234-B and 234-C of the Act, for waiver of interest.
The Return for the year 1993 - 94, was required to be filed by the Petitioner on or before 31.08.1993, and for the year 1994-95, on or before 31.01.1995. The Petitioner has disclosed his taxable income as Rs. 2,15,540 /(Rupees Two Lakhs Fifteen Thousand Five Hundred and Forty only), for the year 1993-94, and Rs. 1,78,910/- (Rupees One Lakh Seventy Eight Thousand Nine Hundred and Ten only), for the year 1994 - 95.
In the Retur n filed by the Petitioner, besides the t axable income referred to above, he also disclosed the receipt of Rs. 2,00,000/- (Rupees Two Lakhs only), as gift from a Non Resident Indian, and did not include it in his taxable income.
The Petitioner received the intimation of receipt of Returns for the year 1993 - 94, on 15.03.1996, and for the year 1994-95, on 04.12.1998. The petitioner, t hereafter, filed a Revised Return on 10. 07. 1996, by including the gift amount of Rs. 2,00,000/- (Rupees Two Lakhs only), as taxable income, and paid the t ax along with interest thereon.
The Petitioner, thereafter, served with a Notice u/s 148 of the Act, on 24.07.1996, though the Notice was dated 26.06.1996. The second Respondent, thereafter, passed an order u/s 143(3) of the Act, read with Section 147 of the Act, imposing interest, on the count of delayed Returns under Sections 234-A, 234-B and 234-C. The penalty proceedings initiated against the Petitioner u/s 271(1)(c) of the Act was, however, dropped.
The Petitioner, being aggrieved by the order passed u/s 143(3) read with 147 of the Act, filed two separate applications u/s 119(2)(a) of the Act, before the Chief Commissioner of Income Tax, Trichy for waiver of interest.
The ground pleaded by the Petitioner, for waiver of interest was, that the Petitioner h ad filed the revised return voluntarily, and that therefore, no i nterest could be imposed u/s 234-A, 234-B and 234-C of the Act.
The second ground taken by the Petitioner was, that the delay in filing the Return was on account of unavoidable circumstances, as he bona fidely believe, that the gift received from the Non Resident Indian was not taxable. It was subsequently, on coming to know, that it may not be possible for him, to prove the genuineness of the gift, that Revised Returns were filed, by adding the gift, as taxable income. It was submitted by the Petitioner, that before filing the Revised Return, the Petitioner had approached the Assessing Officer, who had showed the petitioner, to file a Revised Return voluntarily, and in that event, he would not be subjected to any penalty, or interest u/s 234-A, 234-B and 234-C of the Act.
The applications filed by the Petitioner were rejected by the lear ned Chief Commissioner of Income Tax, on the ground, that he exercised the delegated power in pursuance to the Board''s order u/s 119(2)(a) in No. 400/29/2002-IT(B) dated 26.06.2006, by superseding earlier orders dated 23.05.1996, and 30.01.1997, only in specified classes of cases. The learned Chief Commissioner, Income Tax was of the view, that the delegated power can be exercised strictly within the para meters of specific delegation, and t here is no discretion with the delegate, to determine the mat ter beyond the said parameters. The case of the Petitioner was held to be not falling within the ambit of order, delegating the powers of interest charged under Sections 234-A, 234-B or 234-C of the Act were made out.
The learned Chief Commissioner also held, that the waiver of i nterest was permissible, where the books of accounts, and documents were seized by the Department, and the delay in filing the Return of Income Tax, therefore, could not be attributed to the Assessee. Secondly, where the delay was due to unavoidable circumstances, and that the Return of Income was filed by the Assessee voluntarily without detection by the Assessing Officer.
The finding of the Chief Commissioner was, that the case of the petitioner did not fall in the first clause, and as regards the second situation was concerned, there was no material placed on record, which could lead to a conclusion, that the Petitioner was prevented from filing the Return due to unavoidable circumstances. A finding was also recorded, that the Return was not filed voluntarily, as it was filed only after issuance of Notice u/s 148 of the Act.
The learned counsel for the Petitioner has challenged the i mpugned order, by contending, that the finding recorded by the learned Chief Commissioner of Income Tax, Trichy, that there is no discretion with him, to determine the matter beyond the parameters of CBDT cannot be sustained in law, in view of the Judgment of this Court in W.P.No. 3221 of 2004 (Mr. T.N. Arumugam. V. The Chief Commissioner of Income Tax and Anr ) decided on 18.09.2008, and the judgment of the Hon''ble Division Bench of this Court in W.P.No. 1996 of 2003 (N. Haridas and Co. V. Chief Commissioner of Income Tax And Anr. ) decided on 27.02.2007, wherein this Court was pleased to l ay down, that the learned Chief Commissioner of Income Tax can waive or reduce the interest, if he satisfied, that it is a fit case to do so, on the facts and the circumstances of the case. The Chief Commissioner of Income Tax, in view of the law, laid down by this Court can consider the facts of the case of the Assesses, for waiver or reduction of interest, subject to his satisfaction, that the facts and circumstances making out a case for doing so.
There is force in the contention of the learned counsel for the Petitioner. The impugned order proceeds on the presumption, as if the learned Chief Commissioner of Income Tax did not have jurisdiction, to reduce or waiver of the interest on account of u navoidable circumstances, or on the facts of the case, as projected while deciding the application u/s 119(2)(a) of the Act.
The learned counsel for the Petitioner also contended, that the finding of the learned Chief Commissioner, that the Return was not filed voluntarily cannot be sustained, as it is the case of the parties, that Revised Returns were filed on 10.07.1996, whereas the Notice u/s 148 of the Act, was served on the Petitioner only on 24.07.1996.
There is also force in this contention of the Learned Counsel for the Petitioner, as the notice was to take effect from the date of service, and not from the date of issuance of Notice. Though the Notice was dated 26. 06. 1996, it was served only on 24.07.1996 i.e., after the Petitioner had already filed Returns voluntarily, and therefore, the Revised Returns were required to be treated voluntarily.
The impugned order cannot also be sustained for the reason, that the learned Chief Commissioner of Income Tax has not considered the stand taken by the Petitioner, t ha t the gift of Non Resident Indian was not included, as the goods were excluded in case the source could be justified, and that the Petitioner had included this in the t taxable income, to avoid the burden of proving the source of the gift, as he was assured, that no penalty or interest would be charged. The question whether the impression formed by the Petitioner was sufficient, and could be treated to be an unavoidable circumstances was required to be gone into, and decided. The impugned order is completely silent on this. The impugned order, therefore, deserves to be set aside, even on this ground.
The learned Standing Counsel for the Respondents contended, that the impugned order does not call for any interference, as the learned Chief Commissioner of Income Tax had rightly come to the conclusion, that the disclosure was not voluntary as the Revised Returns were filed only on 1 0. 0 7. 1 9 6, i.e. after r issu a nce of Notice dated 26. 06. 1996.
This contention of the learned Standing Counsel for the Respondents deserves to be noticed to be rejected, as observed in the earlier part of the order, that the notice could t ake effect from the date of service, and not from the date it was drafted by the Department, and kept in its file, as it is not disputed, that the notice, in fact, served on the Petitioner only on 24.07.1996.
It was also the contention of the learned Standing Counsel for the Respondents, that the stand of the Petitioner, that it was due to unavoidable circumstances, th at the amount was not included also cannot be accepted, as the Petitioner was in know of the receipt of the gift, as it was shown even in the Original Return filed.
This contention again cannot be accepted, as a positive finding is required to be given on the facts, as to whether the Petitioner was justified in excluding this amount, as it is not disputed, that the gift from Non Resident Indian was exempted from taxable income, subject to proving of the source, and its genuineness. This question was required to be determined by the competent authority, and cannot left to presumptions.
Therefore, for the reasons stated herein above, these writ petitions are allowed, the impugned orders are set aside, and the cases are remitted back to the learned Chief Commissioner of Income Tax, Trichy to re-consider the question of waiver, or reduction of interest afresh, by taking into consideration facts and circumstances, by taking the filing of the Revised Return to be voluntarily.
No costs.
Consequently, the connected M.P. (MD) Nos. 1 and 2 of 2008 are closed.