Judgment:
ORDER
K. Chandru, J.
1. The petitioner is an assessee under the Income Tax Act, 1961. In the present writ petition, he is challenging the order passed by the Chief Commissioner of Income Tax dated 8/3/2004 in which the petitioner's waiver of interest under Sections 234(b) and 234(c) was rejected by the impugned order. The first respondent rejected the request for waiver on the ground that he has not satisfied the condition prescribed in the Board's circular and that the return of income was filed voluntarily by the petitioner and the tax portion of the demand on the assessed income by the assessee. Even though in paragraph 7 of the impugned order, the Commissioner for Income Tax has recorded that there was no doubt that return of income filed was voluntarily, but the only question is the conditions for consideration for waiver of interest was not satisfied.
2. The writ petition was admitted on 9/11/2004 and on notice Mr. T. Ravikumar learned standing counsel for the Income Tax submits that so long as the petitioner's satisfy the condition precedent for seeking of waiver of interest, the order impugned does not suffer from any infirmity. He has also referred to the preconditions prescribed in the circular and stated that it was not fulfilled by the petitioner.
3. Per contra, the learned Counsel for the petitioner brought to the notice of the Court the Division Bench judgment of Gujarat High Court in Bhanuben Panchal and Chandrikaben Panchal v. Chief Commissioner of Income Tax : [2004]269ITR27(Guj) and referred to the following passage found in page 34 which is as follows:
Under the circumstances, when the assessee is able to satisfy the Chief Commissioner that the delay in filing the return of income was due to unavoidable circumstances, it will be absurd to hold that the assessee is not permitted to persuade the Chief Commissioner/Director General of Income-tax to condone the delay in later payment of taxes when such delay is also due to the same unavoidable circumstances or for reasons beyond the control of the assessee.
4. He further submitted that the conditions for persuading the authority is not exhaustive and it is not limited by the circular issued by the Board. All that the requirement is that the Commissioner must be satisfied with the genuine claim made by the assessee for waiver of interest.
5. The learned Counsel has filed an additional typed set and referred to the requisition made by the petitioner dated 19/3/1997 setting out the circumstances under which the petitioner had paid the tax and also the reason for him in getting the details in the remittance made in his favour. Therefore, it cannot be said that there are no reasons adduced by the petitioner and even the so called delay has been explained.
6. The learned Counsel also brought to the notice of the judgment of the Division Bench reported in : [2008]296ITR246(Mad) . The Division Bench in paragraphs 5, 6 and 7 had observed as follows:
5. Though the respondents claim that the levy of interest is mandatory in the case of default on the part of the assessee to pay tax demanded, it is not disputed that the first respondent, if satisfied on the facts and circumstances of the case, can reduce or waive interest. But, in the impugned order, the first respondent, without going into the merits of the case, observed that he is not empowered to waive the interest on the facts of the case and within the meaning of the notification F. No. 400/234/95/IT(B) dated May 23, 1996, governing waiver of interest.
6. On the other hand, a reading of the notification F. No. 400/234/95/IT (B) dated May 23, 1996 (see : [1997]225ITR101(Mad) ), as found in the counter affidavit shows that the Chief Commissioner, the first respondent herein, can waive or reduce interest, if he is satisfied that it is a fit case to do so on the facts and circumstances. That apart, the petitioner has produced a copy of the notification in F. No. 400/29/2002/IT(B), dated May 23, 1996, in which it is stated that the Chief Commissioner can consider the case of the assessee for waiver or reduction of interest if he is satisfied that on the facts and circumstances it is a fit case for doing so.
7. But the first respondent in the impugned order has merely observed that the condition prescribed in the notification dated May 23, 1996, is not satisfied, without going into the unavoidable circumstances of the case. We are of the view that the first respondent should have taken note of the unavoidable circumstance, viz., the sudden demise of the managing partner at the time when the tax under the Voluntary Disclosure of Income Scheme was demanded. Further, the petitioner filed a revised return on receipt of notice under Section 148 of the Income-tax Act and paid tax accepting the reassessment. We, therefore, hold that the first respondent is not correct in rejecting the claim of the petitioner for waiver of interest without properly appreciating the facts and circumstance of the case.
7. In the light of the same, the petitioner is entitled to succeed. However, this Court is not in granting any direction to refund the amount as originally prayed for in the writ petition. It is suffice to say that the first respondent shall consider the circumstances under which the petitioner was unable to pay the tax earlier and also the justification of his seeking for waiver and refund of the interest amount paid. The petitioner also shall be given an opportunity by the first respondent to put forth any additional points in his favour. The first respondent shall consider the representation of the petitioner and also any additional representation made by him and pass an appropriate order within a period of four weeks from the date of receipt of a copy of this order.
8. With the above direction, this writ petition is disposed of. No costs.