BASO DEVI & ORS. vs. CENTRAL BOARD OF DIRECT TAXES & ORS.

In the first round, the brief facts which need to be noticed are that the petitioners had preferred civil writ petition No.3537 of 2003 before this Court praying for allowing waiver of the interest amount as assessed already and charged under Section 234A, 234B and 234C of the Income Tax Act, 1961 for non submission of assessment of income tax returns for the period from 1991 upto 2000. Land of Late Megh Raj, predecessor-in-interest of the petitioners measuring 33 acres and 10 marlas was acquired by Government of Haryana, vide notifications dated SUMIT KUMAR 2024.02.28 10:23 order/judgment

The Chief Commissioner, Income Tax thereafter again considered the application under Section 119(2)(a) of the Act of 1961 as directed by the High Court and passed an order on 23.10.2003, confirming the earlier order and rejecting the application. The order dated 23.10.2003 is impugned before us. SUMIT KUMAR 2024.02.28 10:23 order/judgment

Learned counsel for the petitioners has taken us to the order passed by the Chief Commissioner and submits that the authority has failed to take into consideration the observations of the High Court as well as failed to interpret the circular issued by CBDT dated 23.05.1996 in its correct perspective and has wrongfully upheld the interest assessed on account of non-payment of advance tax. He submits that the said interest ought to have been made as the circumstances satisfied that to recondition as required for waiver in terms of CBDT circular dated 23.05.1996, mainly that the return of the income could not be filed due to unavoidable circumstances and the return of the income was filed voluntarily without there being a detection by the Assessing Officer.

Per contra, learned counsel for the department has submitted that as the returns of the income were filed by the concerned assessee only after he was informed of non-filing of the returns, the same would amount to have been detected by the Assessing Officer and therefore, the benefit of the notification issued by the CBDT dated 23.05.1996 cannot be applied to the present case and the application under Section 119(2)(a) of the Act of 1961 has rightly been rejected.

We have considered the submissions and carefully gone through the orders passed by the Chief Commissioner, Income Tax. We find that the High Court had reached to a conclusion that an inference cannot be drawn that assessee Megh Raj had deliberately tried to mislead the authorities. The conclusion has also been drawn that old age and illiteracy of the assessee are important factors which should be taken into account while judging the veracity of the assertion regarding his ignorance relating to filing of returns. The Court has also reached to a SUMIT KUMAR 2024.02.28 10:23 order/judgment

The question, therefore, arises before us is whether it is the case of filing of returns voluntarily without detection. The word detection would have to be understood in terms of the provisions of the Income Tax Act while in layman knowledge the detection would be coming to know of a particular aspect alone, but in terms of Income Tax Act, the provisions of Sections 142 and 148 of the Act of 1961 would come into play i.e. where there is a evasion on the part of any assessee which comes to the knowledge of the Assessing Officer and he initiates proceedings by issuing notice under Section 142(1) of the Act of 1961 that it can be said that the Assessing Officer has detected such an action of evasion of tax. It is also noticed and admitted position that till the date, petitioner Megh Raj filed his returns and deposited the tax, no notice under Section 142 of the Act of 1961 was issued nor any notice under Section 148 of the Act of 1961 was issued as has been noticed in the impugned order also.

In the present case interestingly, the Assessing Officer came to know about the Form 15-H and information mentioned therein which admittedly was signed by the assessee on dotted lines. Having come to SUMIT KUMAR 2024.02.28 10:23 order/judgment

The second condition relating to the assessee having not filed return of income due to unavoidable circumstances though on the face of it cannot be said to be a situation available on record but as has already been observed by this Court in the earlier order (supra), the old age and illiteracy of assessee are important factors. The same therefore can be said to be relevant and treated as unavoidable circumstances. In view thereof, the order passed by the Chief Commissioner holding the said circumstances as not sufficient for waiver of tax are found to be unjustified and misinterpretation of CBDT notification. The notification appears to have been issued by the CBDT especially to deal with the cases like the one in hand. Once the citizen is ready to deposit and immediately deposit the tax upon coming to know of his liability, it cannot be said that he has deliberately or willfully evaded the depositing of tax and the interest in terms of Section 234A of the Act of 1961 can be waived.

In view of the aforesaid findings, this writ petition deserves to be allowed and the contents of the petitioners are sustained. The order passed on 24.10.2003 is quashed and set aside. Vide interim order, this Court on 04.12.2003, restrained the respondent from recovering the SUMIT KUMAR 2024.02.28 10:23 order/judgment