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TMI Blog2021 (8) TMI 1003X X X X Extracts X X X X X X X X Extracts X X X X ..... tory or name or co-artists. Such advances will be treated as income and brought to books for accounting and taxation, only in the year, when the project materializes as it is common parlance in the industry that many projects would be dropped or delayed due to various reasons, including the call sheet problem. The petitioner sometimes out of movies. While so, he has been facing harassment at the hands of the respondents for quite sometime. 3. This being the professional difficulties faced by the petitioner, it is contended that search operation was conducted in the premises of the petitioner on 19.10.2010. The assessment orders were passed by the third respondent on 30.12.2011 for the assessment years 2007-2008 and 2008-2009. The appeals filed by the writ petitioner before the Commissioner of Income Tax (Appeals) was partly allowed on 27.03.2013. As against the same, appeals and counter appeals were filed by the third respondent before the Income Tax Appellate Tribunal. By common order dated 23.08.2013, all the appeals and cross appeals were rejected confirming the orders of the CIT(A). However, the third respondent had not given effect to the orders of the Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y submitting the returns of income punctually and therefore, he is entitled for waiver of interest as contemplated under Section 220(2A) of the Act. 7. The learned counsel for the petitioner drawn the attention of this Court with reference to various representations submitted by the writ petitioner. The representations were submitted on 23.05.2017, 05.09.2017 and 18.09.2017 respectively seeking waiver of interest under Section 220(2) of the Income Tax Act. However, the first respondent considered the first representation dated 23.05.2017 and subsequent representations sent by the petitioner were not considered. Thus, nonconsideration of the grounds raised by the petitioner would vitiate the entire order and the matter has to be remitted back to the authority for the fresh consideration of all the materials submitted by the writ petitioner. 8. The learned counsel appearing on behalf of the writ petitioner is of the opinion that, the writ on hand is the fit case for remand, in view of the fact that, the authority has not exercised jurisdiction as contemplated under the provisions of the Act. The non-consideration of the relevant materials furnished through representations deprived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... categorically furnished by the assessee in the said representation dated 05.09.2017. In the next representation dated 18.09.2017 also, the petitioner has reiterated the said factual position and requested to grant waiver of interest. However, none of the grounds raised by the petitioner were considered and the rejection order is passed in an unilateral manner and thus, the Writ Petition has to be considered. 12. The learned counsel for the petitioner in support of his contentions relied on the judgment in the case of B.M. Malani vs. Commissioner of Income Tax and another reported in (2008) 10 SCC 617. The following paragraphs are as follows: "14. The submission of Mr.Varma is that non enchashment of demand draft worth Rs. 10 Lakhs as also non-selling of the shares and securities as prayed for by the appellant caused genuine hardship to the assessee, in support where of reliance has been placed on the New Collins Concise English Dictionary; Words and Phrases, Permanent Edn., Vol.18 and Black's Law Dictionary. It was furthermore submitted that had the shares and securities been sold when the request therefor was made, which was worth Rs. 30 Lakhs at the relevant time, the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to accede to the request of the assessee, but that discretion must be judiciously exercised. He has to arrive at a satisfaction that the three conditions laid down therein have been fulfilled before passing an order waiving interest. 20. Compulsion to pay any unjust dues per se would cause hardship. But a question, however, would further arise as to whether the default in payment of the amount was due to circumstances beyond the control of the assessee." 13. Relying on the said findings of the Apex Court, the learned counsel appearing for the petitioner reiterated that the waiver of interest in the present case ought to have been allowed by the first respondent. The Supreme Court in clear terms held that, genuine hardship would, inter alia, mean a genuine difficulty. Thus mere possession of assets larger in nature would never be a ground to reject the ground of difficulty raised by the assessee in respect of other instances. It is further considered that compulsion to pay any unjust dues per se would cause hardship to the assessee. In the present case, the petitioner is asked to pay the interest in an unjust manner and therefore, the same would cause hardship to the petitioner a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgments cited are of no avail to the petitioner. 17. The learned Senior Standing counsel appearing on behalf of the respondents Income Tax Department disputed the contentions raised on behalf of the petitioner by stating that, the case of the petitioner is not the one where regular assessment order has been passed. There was a search operation conducted in the premises of the petitioner. Admittedly, based on the search and seizure under Section 132 of the Income Tax Act, the assessment orders were passed under Section 153A of the Income Tax Act as the petitioner is a searched person. The petitioner initially had not paid the demand made by the department. There was non-cooperation on the part of the assessee in the present case. Even in such circumstances, the petitioner had no intention to pay the interest based on the demand made under Section 156 of the Act which was communicated along with the assessment order and thereafter, claimed waiver of interest by filing an appropriate application under Section 220(2A) of the Income Tax Act. 18. The learned Senior Standing counsel reiterated that in such cases where demand of interest is made along with the assessment order the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel appearing on behalf of the petitioner as well as the learned Senior Standing counsel appearing on behalf of the respondents, it is necessary to consider the scope of Section 220 of the Income Tax Act. The said section deals, when tax payable and when assessee deemed in default. If the assessee considered as deemed in default, then he is liable to pay the compensatory interest as specified under sub-section (2) of Section 220. 22. Section 220 sub-section (1) states that "any amount, otherwise than by way of advance tax, specified as payable in a notice of demand under Section 156 shall be paid within thirty days of the service of the notice at the place and to the person mentioned in the notice". Therefore any amount of advance tax specified payable or on tax demand is made, the same is to be made within thirty days. If not paid, then sub-section (2) of 220 of the Act come into operation. The sub-section(2) contemplates that "if the amount specified in any notice of demand under Section 156 is not paid within the period limited under sub-section (1), the assessee shall be liable to pay simple interest at 1% for every month or part of a month comprised in the period commen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e satisfaction to be adjudicated and assessed by the Competent Authority under the said provision. The second condition that default in payment of tax, due to circumstances beyond the control of the assessee is also to be established with reference to evidences. The evidences must be not only acceptable but must have nexus with reference to the conditions stipulated in the provision. Thirdly, co-operation of the assessee during the course of enquiry relating to the assessment or any proceedings for recording any amount due from the assesse, the records are to be verified and assessee if had sufficient reasons are at liberty to revert the same. However, the non-cooperation is to be considered with reference to the conduct of the assessee during the course of any proceedings under the Income Tax Act. Thus, all the three conditions contemplated under the said provisions are to be complied with cumulatively. 27. Keeping in mind the imperative conditions stipulated under Section 220(2A) of the Act, let us consider the findings of the first respondent in the impugned order dated 31.05.2018. The application filed by the petitioner under Section 220(2A) of the Income Tax Act was entertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 011), but the assessee furnished the return of income only on 15.07.2011. The assessee's explanation was only that records could not be recovered from the accountant. However the assessee could not substantiate the claim with any proof. Again notice u/s 143(2) was issued on 09.09.2011 posting the case on 16.09.2011. Again notice u/s 142(1) of the IT Act was issued on 19.09.2011 posting the case for hearing on 28.09.2011. In response the assessee's AR appeared only on 03.10.2011. Again the case was posted on 10.11.2011. In response the AR appeared only on 05.12.2011. Further with regard to A.Y. 2007-08, most of the additions made by the Assessing Officer were upheld both by the CIT(A) and ITAT also. Hence it is clear that the assessee has not furnished the full details of the income even after search." 30. The first respondent further made a findings with reference to the assessment years 2008-09 as follows: "Further with regard to A.Y. 2008-09, while giving effect to the ITAT order on 25.07.2014, there was an omission by the Assessing Officer which was not brought to the notice by the Assessing Officer which was rectified only on 29.03.2017. Hence it is clear that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he liability of the assessee to pay the interest." 32. As far as the judgment cited by the learned counsel for the petitioner in the case of B.M.Malani cited supra, the Hon'ble Apex Court in clear terms held that, the genuine hardship would mean genuine difficulty which is to be established. In this regard, the learned counsel for the petitioner reiterated that mere possession of assests by the assessee cannot be a disqualification to consider the ground of genuine difficulty. Certainly, the learned counsel for the petitioner is right in saying so. However, the genuine difficulty as defined is the subjective satisfaction of the authority competent, which is to be established by the assessee. Therefore, there is no quarrel on the principles relied on. However, such principles must be applied with reference to the facts and circumstances established in the case on hand. The Hon'ble Apex Court ruled that as per the provisions all the three conditions are to be complied cumulatively for the purpose of entitlement of waiver of interest. In the present case, the first respondent / Commissioner considered the petition filed by the assessee with reference to the records / document ..... X X X X Extracts X X X X X X X X Extracts X X X X
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