H.A.G. Dastagir Sherif vs Commissioner of Income Tax and Another

R. Jayasimha Babu, J.—The assessee''s request for waiver of interest u/s 220(2A) of the Income Tax Act, 1961, for the years 1974-75 to

1984-85 as also for other years was rejected by the Commissioner who held that no undue hardship was caused to the assessee by the assessee

having to pay the interest so levied.

It is submitted by learned counsel for the assessee that the amount of interest for all these years as also for other years was collected by the

Revenue at the time the certificate u/s 230A was issued to the petitioner, which certificate he had sought prior to the sale of the property owned by

him. That the property was sold as found by the Commissioner for a sum of Rs. 5.50 crores. The aggregate amount of the interest payable by the

assessee for these years is about Rs. 5.3 lakhs. The Commissioner was of the view that no undue hardship would be caused to the assessee in the

background of the fact that very substantial consideration had been received by the assessee.

Learned counsel for the assessee relying on the decision of the Madhya Pradesh High Court in the case of K.L. Jaiswal Vs. Wealth Tax Officer

and Another, , submitted that the point of time with reference to which the assessee''s hardship has to be considered, is the time of assessment and

not at any subsequent point of time. In the case relied upon by counsel, the asses-see''s request for waiver had been rejected on the ground that

the amounts had already been collected and no other reason was given for the rejection. The court in that background held that the word ""case

referred to in Clause (i) of Sub-section (4) of Section 18B of the Wealth-tax Act, 1957, has a reference to the entire case commencing from the

filing of the return of wealth and does not refer to the proceedings which commence from the filing of the application under Sub-section (4) of

Section 18B for waiver or reduction of the penalty. With great respect I am unable to agree with the view that circumstances prevailing at the time

of consideration of application for waiver are not relevant. The Commissioner has to consider the circumstances that prevailed at the time his

jurisdiction is invoked and all circumstances then prevailing can be taken note of by the Commissioner. There is no artificial line to be drawn at any

particular point preceding the date of decision up to which point alone the circumstances of the case should be regarded as worthy of

consideration.

Though the mere fact of payment by itself may not be held against the applicant seeking waiver, if there are other circumstances, warranting

waiver, when it is a matter of record that at the time the waiver was sought and at the time the order was passed thereon, the assessee had

received a very substantial sum of Rs. 5.50 lakhs as consideration for the sale of his property and the amount of interest which he was required to

pay was in the sum of Rs. 5.50 lakhs which amount is about one per cent, of the consideration received, it certainly cannot be said that any undue

hardship was being caused to the assessee by reason of the waiver being denied to him.

The object of the provision enabling the Commissioner to waive interest and penalty is not to add to the wealth of the assessee, but to relieve the

assessee from genuine hardship. The ordinary rule is that the persons who do not obey the law in the manner required are liable to be penalised.

They may be relieved of that liability if the circumstances specially provided for by the statute are shown to exist and it is for the persons seeking

waiver to demonstrate that the waiver is warranted having regard to the statutory conditions for waiver. If at the time the relief is sought, the asses-

see had no hardship, relief cannot be granted by holding that at some time in the past the assessee had hardship. Whatever hardship he may have

had earlier had already been relieved by reason of the very substantial consideration he received from the sale of the property. There was at the

time of the order of the Commissioner no hardship requiring relief. The order of the Commissioner, therefore, is not one which requires

interference. The writ petitions are dismissed. No costs.