TMI Blog2004 (3) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... rt was delivered by M. S. SHAH J. - Rule. Mr. B. T. Rao, learned standing counsel for the Revenue waives service of rule. In the facts and circumstances of the case, the petition is taken up for final disposal today. What is challenged in this petition under article 226 of the Constitution is the order dated October 14, 2003 (annexure O), passed by the Chief Commissioner of Income-tax, Surat, under section 119(2)(a) read with sections 234A, 234B and 234C of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), granting partial waiver of interest under section 234A of the Act and rejecting the petitioner's request for waiver of interest under sections 234B and 234C of the Act. The controversy centres around waiver of interest for the assessment years 1992-93, 1993-94 and 1994-95. The interest was levied as under: ----------------------------------------------------------------------- Assessment Interest charged years ----------------------------------------------------------------------- Under Section Under section Under section Total 234A 234B 234C ------------------------------------------ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the charitable trust with which he was associated. (f) He was survived by his widow (the petitioner) and two daughters out of whom, one has become widow on account of death of her husband in car accident as pointed out in item (b) and there was nobody to look after the family as there was no male person, the elder daughter is not educated and the younger one, who is B.A., became a widow as stated earlier and was shattered and in depressed mental condition. (g) The petitioner (Smt. Shantaben) was a housewife. There was only one employee, i.e., Shirubhai Mistry, who was assisting the late D. C. Mistry and was looking after the accounts and tax matters. He abruptly left in 1988 leaving the mess. (h) The legal heirs made the payment of taxes out of the dividend income received from ASPW and group companies from March, 1990 onwards in respect of liabilities of the petitioner, the late D. C. Mistry, company and the trust. The aggregate tax payment was Rs. 22,57,031 and they could not file the returns of the above year till November, 1996, and July, 1997, as they could effect the payments only in October, 1996." The petitioner, therefore, submitted that the delay in filing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section (1) of section 119 of the Act empowers the Central Board of Direct Taxes to issue such orders, instructions and directions to other income-tax authorities for the proper administration of the Act. Sub-section (2) provides that, without prejudice to the generality of the foregoing power, the Board may issue from time to time (whether by way of relaxation of any of the provisions of sections 139 ... 234A, 234B, 234C ... or otherwise), general or special orders in respect of any class of incomes or class of cases, setting forth directions or instructions (not being prejudicial to the assessees) as to the guidelines, principles or procedures to be followed by other income-tax authorities in the work relating to assessment or collection of revenue . . . The relevant portion of the order as contained in the Notification dated May 23,1996, issued under the aforesaid provisions reads as under: "In exercise of the powers conferred under clause (a) of sub-section (2) of section 119 of the Income-tax Act, 1961, the Central Board of Direct Taxes, hereby direct that the Chief Commissioner of Income-tax and Director General of Income-tax may reduce or waive interest charged under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee's own case, waiver of interest can be granted. It is thus clear that clauses (a) to (d) all state the circumstances beyond the control of the assessee and they may be considered as the species or illustrations of unavoidable circumstances or circumstances beyond the control of the assessee which is the genus contained in clause (e) providing that where a 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, waiver of interest can be considered. It appears to the court that when the circumstances leading to delay in filing of return of income are also the circumstances resulting in late payment of taxes and when the same set of circumstances is considered to be unavoidable circumstances responsible for the delay in filing of the return of income, ordinarily such circumstances would also qualify to be considered as unavoidable circumstances responsible for the delay in late payment of taxes. The very first paragraph of the order confers power on the Chief Commissioner/Director General of Income-tax to waive inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of income overlooks the rationale for conferring the power of reduction/waiver of interest. What is emphasized by para. 1 of the order is that the taxes due must have been paid except the interest in question. Various clauses (a) to (e) merely illustrate the different facets of the underlying principle that waiver of interest is to be considered when the delay on the part of the assessee is due to un-avoidable circumstances or on account of circumstances beyond his control. Even when the assessee's premises are subjected to search and seizure and the books of account are seized and cash is seized and, therefore, the assessee is unable to file the returns within time or to pay the taxes within time, the Central Board of Direct Taxes expects the Chief Commissioner/Director General of Income-tax to view such defaults with leniency. 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 late payment of taxes when such delay ..... 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