2006 (8) TMI 147 - HC - Income Tax

Petitions seek to challenge the orders passed by the Chief Commissioner of Income-tax (Central) declining to grant waiver of the interest claimed by the Department under sections 234A 234B 234C and 220(2) - there was some delay to the extent of about nine months to one year in filing the return and/or paying the advance tax - In the background of the fact that the mother of Rafique has been granted the waiver we set aside the impugned orders passed by the Chief Commissioner of Income-tax (Central) in the above three matters and restore the waiver applications to the file of the Chief Commissioner to examine the submissions of the petitioners afresh.

Summary

Issues involved:
Challenge to orders declining waiver of interest under Income-tax Act, 1961 for assessment year 1996-97 based on delay in filing return and paying advance tax.

Detailed Analysis:

1. Petitioners and their Relationship:
The petitioner in Writ Petition No. 1474 of 2006 is the son of the late Smt. Malek Sultan Abdul Tejani. His daughter named Aziza has filed Writ Petition No. 1476 of 2006, and Writ Petition No. 1475 of 2006 is filed by Rafique A. Malik as the trustee of the estate of his deceased father. All three petitions challenge orders dated May 24, 2005, by the Chief Commissioner of Income-tax (Central) declining to grant waiver of interest under sections 234A, 234B, 234C, and 220(2) of the Income-tax Act, 1961, for the assessment year 1996-97 due to a delay in filing returns and paying advance tax.

2. Grounds for Seeking Waiver:
The assessees, involved in the business known as Metro Shoes, faced delays in filing returns and paying advance tax due to circumstances beyond their control. Rafique Malik was implicated in a controversy known as Shoes Scam, leading to his arrest and the seizure of business records. The petitioners argued that similar circumstances led to the delay, as experienced by their mother, who was granted full waiver previously.

3. Legal Arguments:
The counsel for the petitioners argued that the treatment given to the mother should be extended to the son, granddaughter, and husband, as the circumstances were similar. Reference was made to a judgment of the Division Bench of the Punjab and Haryana High Court, emphasizing that similar cases should not be treated differently. The Revenue's counsel contended that the son and husband, being in charge of the business, should have followed legal requirements, suggesting no justification for leniency.

4. Judicial Decision:
Considering the circumstances and the precedent where the mother was granted a waiver, the High Court set aside the Chief Commissioner's orders and directed a fresh examination of the waiver applications. The court emphasized the need for reconsideration in light of the previous judgment and instructed the petitioners to deposit the interest levied, subject to adjustments they are entitled to or have already received.

5. Final Ruling:
The High Court made the rule absolute, ordering the restoration of the waiver applications to the Chief Commissioner for a fresh review. No costs were awarded in this matter.

This detailed analysis highlights the legal arguments, factual circumstances, and the court's decision in the case challenging the denial of interest waiver under the Income-tax Act, 1961.