SRI.AMBADI KRISHNA MENON vs. THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX

WP(C)/37788/2015HC KeralaKLHC01083623201519 September 2023Author: HONOURABLE MR. JUSTICE AMIT RAWAL20 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the writ petition. The Court found that the grounds raised by the petitioner were not covered by the relevant provisions of the Income Tax Act, 1961, specifically concerning waiver of interest under Sections 234B and 234C. The Principal Chief Commissioner's finding that the petitioner had not shown circumstances beyond his control preventing the payment of advance tax was upheld. The Court reiterated that interest levied for non-payment of advance tax is compensatory, not penal. It was noted that the petitioner's grounds did not fall within the clauses (a) to (e) of the CBDT notification dated 26.06.2006. Specifically, the claim for immunity from advance tax under Section 207(2) was found not tenable as its provisions were applicable from AY 2012-13 onwards, not AY 2011-12. Furthermore, the tax on capital gains was not paid by March 31st of the financial year, disqualifying the petitioner from exemption under the proviso to Section 234C. No ground for interference was made out.

What were the facts?

The petitioner, Sri. Ambadi Krishna Menon, an assessee under the Income Tax Act, 1961, filed a writ petition challenging the order dated 22.09.2015 passed by the Principal Chief Commissioner of Income Tax, Kerala. This order rejected his application for waiver of interest levied under Sections 234A, 234B, and 234C for assessment year 2011-12. The petitioner's income increased significantly in FY 2010-11 due to the sale of equity shares, which he mistakenly treated as business income instead of capital gains. Consequently, he failed to pay advance tax as required. Upon realizing the error, he rectified it, offered the taxable income, and applied for waiver of interest. His application was dismissed, leading to this writ petition.

What were the issues?

1. Whether the impugned order of the Principal Chief Commissioner of Income Tax, rejecting the waiver of interest under Sections 234B and 234C of the Income Tax Act, 1961, is sustainable in law, considering the petitioner's submission that the omission was inadvertent and not due to willful default or intentional neglect, but absence of professional advice. Assessee's Contentions: - The petitioner argued that the impugned order failed to consider Sections 234B and 234C of the Act. He contended that his case falls within the provisions for waiver and that similarly situated persons have been granted exemptions. - He asserted that there was no criminal intent, mens rea, or willful neglect, and the mistake arose from a lack of legal advice. - Grounds for waiver included: ignorance of bonus share computation rules, voluntary filing of a revised return, assessment completion based on the revised return, regular filing history without penalties, substantial tax payment, applicability of Section 207(2) for those above 60 with no business income, capital gains accruing late in the year, and that CBDT notification instances are illustrative and hardship should be considered. Revenue's Contentions: - The Standing Counsel for the Income Tax Department supported the impugned order. - They argued that none of the petitioner's submissions were provided for under Sections 234B and 234C of the Income Tax Act, 1961. - They urged the Court to dismiss the writ petition.

Which sections of the Income-tax Act were involved?

Section 234A,Section 234B,Section 234C,Section 207,Section 208,Section 143(3),Section 147,Section 273A(4)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE AMIT RAWAL TUE AY, THE 19TH DAY OF SEPTEMBER 2023 / 28TH BHADRA, 1945 WP(C) NO. 37788 OF 2015 PETITIONER: SRI.AMBADI KRISHNA MENON AGED 73 YEARS 'AMBADI RETREAT', CHILAVANNOOR ROAD, KADAVANTHRA, KOCHI - PIN 682 020. BY ADV SRI.DALE P.KURIEN RESPONDENTS: 1 THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX CENTRAL REVENUE BUILDINGS, I.S.PRESS ROAD, KOCHI - 682 018. 2 INCOME TAX OFFICER WARD-I, RANGE-I, CENTRAL REVENUE BUILDINGS, I.S.PRESS ROAD, KOCHI - 682 018. 3 THE COMMISSIONER OF INCOME TAX CENTRAL REVENUE BUILDINGS, I.S.PRESS ROAD, KOCHI - 682 018. 4 THE CENTRAL BOARD OF DIRECT TAXES NEW DELHI - 400 001, REPRESENTED BY ITSEX-OFFICIO MEMBER SECRETARY. 5 UNION OF INDIA REPRESENTED BY ITS SECRETARY TO MINISTRY OF FINANCE, SHASTRI BHAVAN, NEW DELHI -110 001. BY ADVS. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING BEEN HEARD ON 19.09.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 37788 OF 2015 -2- JUDGMENT

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Order Ext.P8 of the Principal Chi

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