9911796707
TMI Blog2013 (8) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... on petition by an order dated 06.11.1990, giving relief of waiver of interest for a period of four months. The petitioner has also challenged Circular No. 492 dated 21.07.1987 issued by the Central Board of Direct Taxes on the subject of waiver of interest under rule 40 (1) of the said Rules as being ultra vires of the Act and/or of the said Rules. 2. Before we set out the submissions of the parties, it would be necessary to note the sequence of events. 3. On 29.07.1985 the petitioner filed its return of income for the assessment year 1985-86 declaring an income of Rs.3,61,87,550/- and paid the balance tax (over and above the advance tax already paid earlier) by way of self assessment tax under section 140A of the said Act. Thereafter, the petitioner filed a revised return of income on 13.01.1986 declaring an income of Rs.3,81,39,990/- on which a further payment of Rs. 11,27,534/- was made under section 140A of the said Act. 4. Thereafter, nothing happened till 09.06.1987 when the assessing officer issued the notice under section 143(2) to the petitioner with regard to the assessment for the assessment year 1985-86. It will be clear that a period of one year had elapsed from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les, at the relevant time, read as under:- "40. Waiver of interest. - The Income-tax Officer may reduce or waive the interest payable under section 215 or section 217 in the cases and under the circumstances mentioned below, namely: - (1) When the relevant assessment is completed more than one year after the submission of the return, the delay in assessment not being attributable to the assessee. (2) Where a person is under section 163 treated as an agent of another person and is assessed upon the latter's income. (3) Where the assessee has income from an unregistered firm assessed under the provisions of clause (b) of section 183. (4) Where the previous year is the financial year or any year ending about the close of the financial year and large profits are made after the 1st March (or the 15th March in cases where the proviso to section 211 applies), in circumstances which could not be foreseen. (5) Any case in which the Inspecting Assistant / Deputy Commissioner considers that the circumstances are such that a reduction or waiver of the interest payable under section 215 or section 217 is justified." 9. Insofar as the claim of waiver under rule 40 (5) was concerned, the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance Act, 1986 with retrospective effect from 1.4.1974 and consequently the claim for depreciation and investment allowance had to be reduced on certain machinery but then simultaneously deduction for capitalised interest has been allowed in the assessment at Rs. 11,03,582/-. The difference is too meagre to call for any specific consideration of item (ii) above. The items at (iii) and (iv) are admittedly the accounting mistakes of the assessee and at this stage it is not possible to give any categorical finding about the reasons for not taking into consideration these amounts at the time of filing the estimates of advance-tax. While proceeding on the assumption that as a prudent person and with due diligence the assessee should have taken into consideration these amounts in filing the estimates of advance tax, I would exclude these items from consideration. The item at Sl. No. (v) is again too meagre and, in any case, since the assessee had lost on the issue in appeals in earlier years, atleast for filing the estimate of advance tax it should have taken this amount into consideration. To conclude I hold that this is not a case where discretion for waiver of interest could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r complete months in making the assessment for which the assessee could not be held responsible and that interest for this period of four months was liable to be waived straightway under rule 40(1) of the said Rules. The Commissioner of Income-tax concluded as under:- "6. On a careful consideration of the facts and circumstances of the case in its entirety and in view of the above discussion I am of the opinion that the case is not at all covered under clause (5) of Rule 40. The delay in completion of the assessment after it was taken up by the issue of a notice u/s 143 (2) on 9.6.1987 is generally attributable to the assessee and as such it is not entitled to waiver of interest for this period. However, the case is partly covered under clause (1) of rule 40 to the extent that there was a delay of four complete months in taking up the assessment after the period of one year from the date of filing the first revised return on 13.1.1986. Accordingly, the waiver of interest for a period of four complete months from 13.1.1987 to 9.6.1987 is ordered. The DCIT is directed to give effect to this order. 7. The petition is partly allowed." 13. At this juncture, it would be relevant to no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factors in an objective manner, no fault can be found with the conclusions arrived by such authorities. 15. In fact the learned counsel for the petitioner did not lay much stress on the arguments under rule 40(5) but focused his arguments on rule 40(1) of the said Rules. It was contended by him that the period of one year indicated in rule 40(1) is to be considered from the date on which the original return was filed, that is, from 29.07.1985 and not from the date on which the revised return was filed (i.e. 13.01.1986). The contrary was urged on the part of the learned counsel for the respondents. We have already pointed out above that the Commissioner of Income-tax, in the impugned order dated 06.11.1990 has taken the starting point as the date of the filing of the revised return and not the date of filing of the original return. In our view, the Commissioner has correctly taken the date of the revised return as the starting point for computing the period of one year referred to in rule 40(1) of the said Rules. It is obvious that the revised return is filed by an assessee only when he discovers any omission or wrong statement made in the initial return. Therefore, the period betw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts, Commissioner has arrived at a conclusion. This being a petition under article 226 of the Constitution of India we are not sitting as a court of appeal. We cannot substitute our views in place of those of the Commissioner. The facts of C. W. No. 2009 of 1988 are clearly distinguishable. There, the matter was remanded as there was no specific finding recorded as to whether the delay was attributable to the assessee or not. In the present case, specific findings have been recorded. That being the case, when the Commissioner has in exercise of jurisdiction vested in him come to a particular conclusion on the facts for reasons which are recorded in the impugned orders, it would not be proper for us to interfere in exercise of our writ jurisdiction." It may be noticed that in the above extract there is a reference to CW 2009/1988 which also happens to be a case of J.K. Synthetics Ltd. and the said decision was reported in 265 ITR 411 (Del). That case has however been distinguished in the later decision in 270 ITR 95 inasmuch as in the earlier decision (265 ITR 411), the court had remanded the matter as no specific finding had been recorded with regard to the question of delay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Officer exercised the discretion vested in him under rule 40, keeping in view the aforementioned principles, by taking into consideration all the relevant facts. Having given our serious consideration to the facts in hand, we find that both the authorities have failed to consider the assessee's application in its correct perspective. In both the orders, we do not find even a whisper indicating that the delay in completion of the assessment within a period of one year was attributable to the assessee." (Underlining added) From the above extracts it is apparent that the question of delay attributable to the assessee has to be considered in the context of an assessment not being completed within the period of one year from the date of filing of the return. In the facts of the present case it would mean that the question to be addressed would be whether the petitioner/assessee was responsible for any delay in completing the assessment within the period of one year with effect from 13.01.1986 (i.e. the date on which the first revised return was filed). We find that up to 12.01.1987, and, in fact, up to 09.06.1987 the assessing officer did nothing. It is only on 09.06.19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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