HIGH COURT OF KERALA
Shebin Jewellery
Versus
Chief Commissioner of Income-tax, Cochin
W.P. (C) NO. 5799 OF 2008(M)
DECEMBER 3, 2012
JUDGMENT
1. This writ petition is filed challenging Ext.P16 order passed by the Chief Commissioner of Income Tax, Kochi in an application filed by the petitioner seeking waiver of interest imposed on the petitioner/assessee under Section 234A of the Income Tax Act.
2. Imposition of interest was in respect of delay in filing the returns for the assessment year 2001-02 and 2002-03. As per the provisions of the Act, the returns were to be filed on 31/08/2001 and 31/08/2002 during the respective assessment years. The returns were filed only on 03/10/2006.
3. According to the petitioner, the delay in filing the return could not be attributable to the petitioner since after conducting a survey in the office premises of the petitioner, the documents were impounded by the Asst. Director of Income Tax (Investigation), Calicut on 14/02/2002. According to the petitioner, he requested for release of the books by Ext.P1 dated 28/01/2004 addressed to the ADIT (Investigation), specifically stating that those were required for preparation of the returns. When there was no response, a further letter dated 23/03/2004 was issued to the Income Tax Officer of the respective area for obtaining copies of the books. There was no response for some time; but by Ext.P3 dated 29/11/2005, the assessing officer issued notice under Section 148 of the Income Tax Act calling upon him to file the return within twenty days failing which assessment for the year 2001-02 shall be treated as escaped assessment. A similar notice was issued as Ext.P4 in respect of assessment year 2002-03 also on the said date. On receiving the said notice, petitioner again requested the Income Tax officer by letter dated 17/12/2005 stating that since the returns are to be filed, an opportunity should be granted to take copies of the seized documents to file the return of income. Without acceding to the said request, it is stated that by Ext.P6 dated 03/01/2006 the Income Tax Officer had again requested him to file returns, which was replied by Ext.P7 again requesting for taking copies of the books seized from the petitioner.
4. The Income Tax Officer, by Ext.P8 dated 23/01/2006 intimated the petitioner that the books and documents are not in custody of that office and the petitioner was requested to approach the Deputy Commissioner of Income Tax, Central Circle. Petitioner submitted another request Ext.P9 dated 06/02/2006 to the Assistant Commissioner of Income Tax, Central circle, Calicut. He was again faced with another demand by Income Tax Officer for filing returns by notice dated 12/07/2006 for which he had sent a reply wherein he again made a request to the Assistant Commissioner of Income Tax for providing copies of the documents.
5. It is stated that thereafter the documents were received and returns were filed on 03/10/2006 declaring a total loss for the assessment years. The Income Tax Department, after having verified the returns as per Exts.P12 and P13 orders assessed the petitioner and returned a total income of Rs. 2,27,950/- in respect of assessment year 2001-02 and Rs. 4,80,110/- in respect of assessment year 2002-03 and thereby assessing the tax payable and imposing interest under Section 234A as Rs. 60,724/- in respect of assessment year 2001-02 and Rs. 86,507/- in respect of 2002-03. The imposition of interest under Section 234A was challenged by the petitioner by submitting Ext. P14 and P15 to the Chief Commissioner of Income Tax stating that the delay in filing was on account of not getting the copies of books of accounts in time though the Petitioner had requested for the same. This resulted in a common order being passed by the Chief Commissioner of Income Tax as per Ext.P16.
6. It is the contention of the petitioner that the Chief Commissioner had come to the conclusion that the reason for the delay was not due to obtaining the documents in time; but the Commissioner had proceeded on the basis that some margin has to be left for the time required for filing the returns after taking copies of the books and documents and considering the attempt of the assessee was not with full heart, 50% of interest was waived for the period from January 2006 to September 2006.
7. According to the petitioner, he was entitled for waiver of interest for the entire period and should not have been confined to a short period i.e. January 2006 to September 2006 and that too 50% of the said amount. On the other hand, Sri. Jose Joseph, learned Standing Counsel for the Department contends that though the documents were impounded after survey conducted in respect of assessment year 2001-02, the returns ought to have been filed on 31/08/2001 and the documents were impounded only on 14/02/2002. Therefore there is no justification in demanding any waiver of interest for the assessment year 2001-02. In regard to the assessment year 2002-03, though the documents were impounded on 14/03/2002 and returns ought to have been filed on 31/8/2002, the request for release of documents Ext.P1 was issued only on 28/01/2004. Therefore, according to the learned Standing Counsel, if there was any genuine interest in filing returns, the petitioner could have filed the same within the stipulated time as far as 2001-02 assessment year is concerned and in respect of the second return for the assessment year 2002-03, there was no genuinenity in requesting for the documents after the period stipulated.
8. It is further submitted that the application dated 23/03/2004 was for taking books of accounts for the purpose of sales tax assessment for the year 2000-01. It is again submitted that even after taking copies of the impounded documents the assessee had tried to avoid the payment of tax aggregating to Rs. 2,60,753/- for the assessment years 2001-02 and 2002-03 by not declaring the correct total income in the returns filed on 03/10/2006. It is further submitted that there is no statutory right available for the petitioner to demand waiver of interest under Section 234A and waiver of interest is granted only on the basis of Board’s order in F.No.400/129/2002-IT(B) dated 29/06/2006. The applicable provision has been extracted in Ext.P16 order which reads as under:
“It has also specified the class or classes of income in which the reduction or waiver of interest u/s 234A or 234B, or 234C can be considered, as follows:
(a) Where, during in the course of search and seizure operations, books of account etc. were seized and the CCIT/DGIT concerned is satisfied on the facts and circumstances of the case, that the delay in furnishing return was for reasons beyond the control of the assessee, and is not attributable to him,
