TMI Blog2008 (10) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... -A) of the Income Tax Act, was dismissed. 3. Appellant had been carrying on money-lending business and trading in shares and securities. On or about 4.9.1994, a raid was conducted in his residential premises by the authorities in exercise of their power under Section 132 of the Income Tax Act (for short, "the Act"). Amongst others, shares worth market value of Rs. 61.38 lakhs and a demand draft worth Rs. 10 lakhs in the name of PAN Clothing Company Limited were seized. By a letter dated 15.12.1994, a declaration was made by the appellant in terms of sub-Section (4) of Section 132 of the Act, by reason whereof he opted to pay taxes from out of the seized shares and securities stating that the shares be expeditiously disposed of and the sale proceeds therefrom be appropriated towards taxes. The said letter dated 15.12.1994 reads as under : "Please refer to your letter cited in reference above in the matter of payment of taxes. I had made declaration U/s. 132(4) of the Act and pursuant declaration opted to pay taxes from out of the assets namely shares and securities under seizure, as I have no further funds. I have therefore delivered my consent and requested the Asst. Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rthermore opined that the dues as against the appellant could be crystallized only after passing of the order of the Settlement Commission 2.12.1999. The Commissioner held: "Further, as per the enquiry report dated 22.11.2002, obtained from the Income Tax Officer Ward-10 (1), indicates that Sri B.M.Malani has been residing in a house bearing No. 1-11-219, Begumpet, Hyderabad. The property is located in posh area near Airport in Begumpet. The area of the property is about 6000 sq. yds., and value will be around Rs. 2 crores. Thus, property as referred above belongs to HUF and the assessments under consideration were passed in the status of HUF. From the details gathered by the Department, it was revealed that the assessee possesses good resources and he is financially sound and it will not cause any hardship in discharging legitimate tax liability which is in the form of interest u/s 220 (2A) and the tax liability that would have arisen out of his inordinate delay in liquidation of taxes." By reason of the impugned judgment, the High Court opined: "The hardship claimed by the petitioner is on account of lack of resources either moveable or immoveable. Even after the conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51,574 1991-92 28,67,040 29,92,880 1992-93 13,62,100 56,35,038 1993-94 64,505 11,27,964 1994-95 56,880 1,52,880 1995-96 52,880 9,27,880 Total 54,82,805 1,68,09,306" The amount of tax quantified by the Assessing Officer in terms of the order of the Settlement Commission for different Assessment Years were as under: "Assessment Year Tax demand payable (in Rs.) 1988-89 13,54,284 1990-91 37,29,992 1991-92 33,68,567 1992-93 61,39,448 1993-94 7,21,192 1994-95 65,145 1995-96 3,99,023 Total 1,57,77,651" Demand notices were issued accordingly. Taxes were payable in terms thereof on or before 1.4.2000. All amounts paid by the appellant before the said date were adjusted. The appellant had deposited a total amount of Rs.1,60,66,947/- on or before 8.3.2002. The amount of interest calculated at a sum of Rs.31,41,106/- was levied for non-payment of the dues as on 8.3.2002 for Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of the business, the appellant had been carrying on and the magnitude thereof to contend that the appellant did not suffer any genuine hardship. 8. The term `genuine' as per the New Collins Concise English Dictionary is defined as under: `Genuine' means not fake or counterfeit, real, not pretending (not bogus or merely a ruse)" For interpretation of the aforementioned provision, the principle of purposive construction should be resorted to. Levy of interest although is statutory in nature, inter alia for re-compensating the revenue from loss suffered by non-deposit of tax by the assessee within the time specified therefor. The said principle should also be applied for the purpose of determining as to whether any hardship had been caused or not. A genuine hardship would, inter alia, mean a genuine difficulty. That per se would not lead to a conclusion that a person having large assets would never be in difficulty as he can sell those assets and pay the amount of interest levied. The ingredients of genuine hardship must be determined keeping in view the dictionary meaning thereof and the legal conspectus attending thereto. For the said purpose, another well--known ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of exercise of the discretionary jurisdiction on the part of the Commissioner. Appellant volunteered that the securities be sold. Why the said request of the appellant could not be acceded to has not been explained. It was a voluntary act on the part of the appellant. It was not even a case where sub-Section (3) of Section 226 of the Act was resorted to. As the offer was voluntary, the authorities of the Department subject to any statutory interdict could have considered the request of the appellant. It was probably in the interest of the revenue itself to realize its dues. Whether this could be done in law or not has not been gone into. 9. The same ground, however, was not available to the appellant in respect of the demand draft, as in relation thereto no such request was made. The demand draft was in the name of a Company. It may be true that when any document is seized, a presumption is raised that the same belongs to the person from whose possession or control it was seized as is laid down in sub-Section (4A) of Section 132 of the Act, but such a presumption is a rebuttable one. In the absence of any request made by the Assessee himself, probably at that point of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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