KAKUMANU SUDERSHAN RAO vs CHIEF COMMISSIONER OF Income Tax AND ANOTHER.

P. VENKATARAMA REDDI J,-The order of the Chief Commissioner of Income Tax, Andhra Pradesh, bearing No, CC/Tech/104(32) of 1996-97 dated January 27, 1998, is under challenge in this writ petition. The petitioner filed an application for waiver of interest levied under sections 234A, 234B and 234C of the Income Tax Act in respect of the assessment year 1992-93. After giving an opportunity of hearing to the petitioner, the Chief Commissioner passed the following cryptic order :

"Interests charged under sections 234A, 234B and 234C for the assessment year 1992-93 are not waived as the guidelines issued by the Boiir(l m)(ler section 119(2)(a) are not applicable to the facts of the case."

''Flir, 0,11ti-11 Board of Direct Taxes issued an order date(] NNv 25, 199G. In exe rcise or the powers conferred u/s 11'')(2)(~I) (11 the Income Tax Act, empowering the Chief Commissioner and DirectorGeneral of Income Tax to reduce or waive the interest charged '' under the aforesaid sections of the Act in certain classes of cases-or classes of income specified therein, subject to any condition that the said authority may deem fit to impose. However, the basic condition stipulated in the preamble to the opening para of the order is that the assessee should Iwve filed the return of income for the relevant year and paid the entire tax due on the income assessed except the amount of interest. It is the contention of the petitioner that his case comes under para. 2(e) of the said order which reads as follows :

"Whether it return of income could not be filed by the assessee due to unavoidable circumstances and such return of income is filed voluntarily by the assessee, or his legal heirs without detection by the Assessing Officer."

However, the stand of the Department as revealed from the counter and the file is that the return cannot be deemed to be a voluntary return, as the same was filed pursuant to a notice u/s 148 about three years after the search. It is the case of the petitioner that even at the time of search, he gave a declaration u/s 132(4) offering income based on the stock value of Rs. 8.55 lakhs and at the time of regular assessment made u/s 143(l)(a), an additional sum of Rs. 95,000 was also offered and the mere fact that the return was filed and payment made after the notice was issued for the purpose of regularising the voluntary declaration, does not detract from the applicability of clause (e) of para. 2 of the Board''s order.

Reliance is placed, inter alia, on the decision of this court in Sujatha Rubbers Vs. Income Tax Officer and Another, . It is also contended that the Commis1;ioner ought to have passed a reasoned order.

A perusal of the file makes it clear that the Chief Commissioner rejected the application in toto on the ground that the "facts of the case -is mentioned in pages 3, 4 and 5 do not warrant an '' v waiver of interesl".

A perusal of those pages makes it clear4hat there was a clear recomnien dation for waiving a part of interest u/s 234B and for fully waiving interest u/s 234C. As far as interest u/s 234A is concerned, the note put tip by the concerned officials suggested that there is no scope for waiver or reduction inasmuch as the return was filed only after service of notice u/s 148 and moreover there was no seizure of books of account. The ground of rejection by the Chief Commissioner is partly contrary to the note put up before him and accepted hY Iiini. It wotild be contradictory to say that for the reasons staled ii) pages 7) to 5, the case for waiver or reduction is not made out.

Logall,y speaking, the order of the Chief Commissioner is vitiated by non application of mind to the relev '' ant aspects placed before him. Moreover, the question whether the return filed is voluntary or not is at least debatable point. On the totality of the facts and circumstances and licing regard to the contentioe issties. the Chief Commissioner otigill

have passed a reasone(I oi,dui. For the reasons stated above, we set aside the impugned order and remit the matter to the first respondent for de novo consideration 1111d for passing fresh orders, unfettered by the view already taken by him. Till the petitioner''s application is disposed of afresh by the Chief Commissioner, no steps shall be taken to recover the interest.

The writ petition is accordingly disposed of. No costs.