The Hindu Business Line : Consider assessee’s plea for interest waiver on delayed tax payment: HC

The Madurai Bench of the Madras High Court has ruled that an income-tax assessee was entitled to get refund of interest charged by the I-T authorities, and the Chief Commissioner of Income Tax, Tiruchi, was not correct in rejecting the claim of the petitioner-assessee for waiver of interest under Sections 234(b) and 234(c) of the IT Act without properly appreciating the facts and circumstance of the case.

Allowing a writ petition from T.S. Arumugam, proprietor, Sri Jayalakkshmi Textiles, Tiruchengode, Salem, challenging the order dated March 8, 2004 of the Chief Commissioner of Income Tax (CIT), rejecting the application for waiver of interest charged from him, Mr Justice K. Chandru ruled that the petitioner was entitled to succeed. However, this court was not granting any direction to refund the amount as prayed for in the petition.

Consider the circumstance

The first respondent (CIT) shall consider the circumstances under which the petitioner was unable to pay the tax earlier and also the justification of his seeking for waiver and refund of the interest paid. The petitioner should also be given an opportunity to put forth any additional points in his favour.

According to the petitioner, R-1 rejected the request for waiver on the ground that he had not satisfied the condition prescribed in the Board’s circular F.No400/234/95/IT(B) of May 23, 1996 and that the return of income was filed voluntarily by the petitioner.

The petitioner cited the judgment of the Gujarat High Court in Bhanuben Panchal & Chandrikaben Panchal Vs Chief Commissioner of I Tax (269 ITR 27 Gujarat) which said: “…..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…to condone the delay in later payment of taxes…”.

The Judge ruled that R-1 shall consider the representation of the petitioner and pass an appropriate order within 4 weeks.

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