TMI Blog2009 (4) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... he case as seen from the affidavit, would run thus : (i) The petitioner is a popular playback singer both in Tamil and Telugu films. He is assessed to income tax on the file of the Deputy Commissioner of Income Tax, Film Circle, Chennai in File No.10703-N in PAN No.AAEPN-5678-D. Though he is a resident of Chennai, he spends most of his time in Hyderabad, where the bulk of his work lies. According to the petitioner, in the cinema industry the career span being very short and uncertain, the artists usually exert themselves to the full whenever there is demand, leaving no time for anything else. (ii) The petitioner has a very humble beginning in the industry. His peak period has been from 1992 to 1998, during which, he spent most of his time in Hyderabad and normally worked 16 hours a day and because of his commitment, he could not comply with certain obligations, especially those pertaining to payment of Income Tax. It is the plea of the petitioner that the non-compliance of payment of Income Tax returns is neither wilful nor wanton, but only due to the aforesaid bonafide reasons. (iii) The petitioner filed his returns of income voluntarily for the assessment years, 1993-94, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent has further stated that every return filed voluntarily does not merit waiver of interest; if that be the case, then interest under Section 234A in every case will have to be waived. It is only when an assessee is able to establish that the belated return was filed voluntarily and that the delay in filing the return was due to unavoidable circumstances, that waiver of interest can be considered. He also stated that interest is compensatory in nature and there is no case for argument on a matter of interest. The time taken for completion of assessment is not relevant for the purpose of waiver of interest in terms of the Board's Notification. 3b. It is the case of the 1st respondent that the argument of the petitioner with regard to waiver of interest is untenable as interest under Sections 234A and 234B is charged for different reasons. Only since the delay of three months in filing the returns by the petitioner was acceptable, waiver of interest was allowed under Section 234A for the said assessment year. He also stated that interest under Section 234B is levied till the date of assessment and as far as the interest under Section 234C is concerned, the assessee had not paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the 2nd respondent has pointed out that the delay in filing the returns of income were furnished by the petitioner himself in terms of number of days in paragraph no.4 of his affidavit. It is his contention that the petitioner having committed such defaults, can in no terms attribute the delay to the assessing officer and cannot question the legally sanctioned time limit prescribed under Section 153 of the I.T. Act for completion of assessment by the Assessing Officer. According to the 2nd respondent, the assessing officer has passed all the assessment orders well within the time limit statutorily available to him and hence, the order impugned in the present writ petitions is correct, legal and is a reasoned one. 5. Heard Mr.R.Sivaraman, learned counsel for the petitioner and Mr.Arunkurien Joseph, learned Junior Standing Counsel appearing for the respondents. 6. Learned counsel for the petitioner would submit that the petitioner had filed the returns on income voluntarily without detection by the Assessing Officer and that the returns could not be filed by the petitioner in time due to unavoidable circumstances. According to him, the case of the petitioner would square ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also the circumstances resulting into late payment of taxes and when the same set of circumstances are 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. 8. The very first paragraph of the order confers power on the Chief CIT/Director General of IT to waive interest charged under Section 234A, Section 234B or Section 234C of the Act and the classes of cases or classes of income specified in para 2 of the order. The condition precedent is that reduction or waiver of such interest can be ordered only after the assessee has filed the return of income for the relevant assessment year and paid the entire tax due on the income as assessed except the amount of interest for which reduction or waiver has been requested for. ... 9. ... The original petitioner had clearly stated in her waiver petition that the delay in filing the return was on account of the fact that there was delay in arranging for funds. In this set of tragic circumstances, if the same have been considered to be unavoid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepting the reassessment. We therefore hold that the first respondent is not correct in rejecting the claim of the petitioner for waiver of interest without properly appreciating the facts and circumstances of the case. Accordingly, the impugned order is liable to be set aside. Considering the fact that twelve years have passed, the earliest assessment year being 1994-95 and that the assessee has already paid tax as per the reassessment, we are inclined to direct the first respondent to waive the interest levied in the impugned order, instead of remitting the matter back to the first respondent." (iii) yet another decision of this court reported in (2009) 308 ITR 216 in the case of T. N. Arumugam vs. Chief Commissioner of Income Tax and another "7. In the light of the above, the petitioner is entitled to succeed. However, this court is not in granting any direction to refund the amount as originally prayed for in the writ petition. It is suffice to say that the first respondent shall consider the circumstances under which the petitioner was unable to pay the tax earlier and also the jurisdiction for his seeking for waiver and refund of the interest amount paid. The petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven as to why the return was not filed within time for that year. The fact that the assessee had not been assessed to tax earlier, does not by itself constitute a justification. By filing the return belatedly, one cannot claim that fact itself as clothing the person with immunity from the liability of interest." (ii) a decision of the Delhi High Court reported in (2002) 258 ITR 751 ( Sita Holiday Resorts Ltd. vs. Chief Commissioner of Income Tax ) "11. It is well-settled that interest contemplated under Section 234-B for deficiency or default in payment of advance tax is mandatory in nature CIT vs. Anjum M. H. Ghaswala (2001) 252 ITR 11 (SC). There is no provision in the Act authorising any authority to reduce or waive it. However, in order to mitigate the hardships in deserving cases, the Board, in exercise of powers conferred under clause (a) of sub-section (2) of section 119 of the Act, has issued a Circular/Notification No.400/234/95-IT/B dated 23.05.1996, empowering the Chief Commissioner and the Director General, Income Tax, to waive or reduce the interest chargeable under Section 234B and two other sections in the class of cases or class of incomes, specified in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veral arithmetical errors in the said assessments and demand notice, he filed petitions under Section 154 before the Assessing Officer in respect of assessment years 1994-95, 1995-96 and 1996-97 and appeal in respect of the assessment year 1993-94. 10. Thereafter, the petitioner had filed a Waiver Petition before the Chief Commissioner of Income Tax, the 1st respondent herein and explained to him the unavoidable circumstances which prevented him to file returns within the prescribed time limit. The 1st respondent passed an order on 29.03.2004, granting waiver of interest of Rs.43,051/- against the amount of Rs.3,00,832/- under Section 234A and in respect of Section 234B, he granted only a sum of Rs.77,729/- as relief as against Rs.6,06,504/- and confirmed the levy of interest of Rs.23,898/- under Section 234C of the I.T. Act. Aggrieved by the said order of the 1st respondent, the petitioner has filed the present writ petition seeking waiver of interest in full, for the assessment years 1993-94, 1994-95, 1995-96 and 1996-97. 11. The question that arises for consideration is whether the petitioner is entitled to complete waiver of interest on the returns of income under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be liable to pay simple interest at the rate of one per cent per month for a period of three months on the amount of the shortfall from thirty per cent or, as the case may be, sixty per cent of the tax due on the returned income; (ii) the advance tax paid by the assessee on his current income on or before the 15th day of March is less than the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one per cent on the amount of the shortfall from the tax due on the returned income : Provided that nothing contained in this sub-section shall apply to any shortfall in the payment of the tax due on the returned income where such shortfall is on account of under-estimate or failure to estimate (a) the amount of capital gains : or (b) income of the nature referred to in sub-clause (ix) of clause (24) of section 2, and the assessee has paid the whole of the amount of tax payable in respect of income referred to in clause (a) or clause (b), as the case may be, had such income been a part of the total income, as part of the [remaining instalments of advance tax which are due or where no such instalments are due], by the 31st d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the returns and due to unavoidable circumstances, he could not file the returns in time. Learned counsel for the petitioner has consistently pleaded that the petitioner, being a playback singer in the cinema industry and engaged in work continuously for 16 hours a day, could not file the Income Tax returns within the prescribed time limit. While so, it is the case of the respondents that the petitioner filed the returns beyond the time limit prescribed under Sections 139(1) and 139(4) of the I.T. Act. The petitioner's avocation as a playback singer in the cinema industry and his commitment in the industry to work for hours together is not in dispute by the respondents. However, the delay attributable by the petitioner that due to 'busy schedule', he had failed to file the returns in time is the cause of action. It is seen that though there is a delay in filing the returns, the petitioner had filed the returns voluntarily. Naturally, a person in cinema industry is continuously committed to work. Likewise, in the case on hand, the petitioner had been committed to his work and due to some unavoidable circumstances, he could not file the returns within the prescribed time limit. How ..... X X X X Extracts X X X X X X X X Extracts X X X X
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