SHRI SHYAM SUNDER AGRAWAL vs. THE CHIEF COMMISSIONER OF INCOME

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CW/12651/2009HC RajasthanRJHC02016792200929 January 2025Bench: AVNEESH JHINGAN3 pages
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What did the High Court hold?

The Tribunal held that there was no factual or legal mistake in the order rejecting the request for waiver of interest. The petitioner's claim that seized documents were returned in December 1997 was contradicted by their own communication dated November 11, 1997, which stated documents were returned in the first week of September 1997. No valid explanation was provided for the delay in filing the return until August 18, 1998, which was significantly beyond the fifteen-day period stipulated in the notice. Regarding the non-returning of seized documents, the petition was disposed of with a direction for the legal heirs of the petitioner to file an application for the return of documents, substantiating the seized and returned items. The Chief Commissioner of Income Tax, Jaipur, was directed to consider this application expeditiously, within two months of receiving the order's certified copy, and decide on the return of documents within four weeks thereafter if the petitioner was found entitled.

What were the facts?

The petitioner, Shri Shyam Sunder Agrawal, engaged in trading of Tea, Desi Ghee, and edible oil, had his premises searched on March 18 and 26, 1997, leading to the seizure of documents, share certificates, and books of accounts. A notice under Section 158BC of the Income Tax Act, 1961, was issued on August 22, 1997, requiring the petitioner to file a return within fifteen days. The petitioner requested copies of seized documents. A return was filed on August 18, 1998. Interest of Rs. 3,41,225/- under Section 158BFA was levied on November 29, 2005, for the delay in filing the return. The petitioner's application for waiver of this interest was rejected on May 14/15, 2009. A subsequent rectification application led to an amendment stating the delay was eleven months and twelve days, but the waiver request remained rejected. The petitioner also contended that seized documents had not been returned.

What were the issues?

1. Whether the delay in filing the return of income under Section 158BC of the Income Tax Act, 1961, was justifiable, thereby warranting a waiver of interest levied under Section 158BFA of the Act? Assessee's contention: The delay in filing the return was attributable to the department's failure to supply copies of the seized documents and books of accounts. The petitioner also raised the issue of seized share certificates and other documents not being returned by the department. Revenue's contention: Copies of the documents were supplied to the petitioner in the first week of September 1997, as evidenced by the petitioner's own letter dated November 11, 1997. The department indicated that a request for the return of documents would be considered in accordance with law if approached by the petitioner.

Which sections of the Income-tax Act were involved?

Section 158BFA,Section 158BC

AI-generated summary — verify with the full judgment below

[2025:RJ-JP:4108-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 12651/2009 Shri Shyam Sunder Agrawal S/o Late Shri Peeramalji Agrawal, 1012, Misra Rajaji Ka Rasta, Chandpole Bazar, Jaipur, in the State of Rajasthan. ----Petitioner Versus The Chief Commissioner of Income Tax, Central Revenue Building, Statue Circle, Bhagwandas Road, Jaipur- 302005 in the state of Rajasthan. ----Respondent For Petitioner(s) : Mr. Siddharth Ranka with Ms. Satwika Jha For Respondent(s) : Mr. Anuroop Singhi with Mr. N.S. Bhati Mr. Aditya Khandelwal HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MRS. JUSTICE SHUBHA MEHTA Order 29/01/2025 AVNEESH JHINGAN,J (ORAL): 1. This petition is filed aggrieved of rejection of prayer for waiver of interest under Section 158BFA of the Income Tax Act, 1961 (for short ‘the Act’). Further prayer is that all the seized documents and share certificates have not been returned by the department till date. 2. The relevant facts are that petitioner was engaged in trading of Tea, Desi Ghee and edible oil. On 18.03.1997 and 26.03.1997 search was conducted by the Income Tax Department of the premise of the petitioner. The documents, share certificates and books of accounts were seized. Notice dated 22.08.1997 under Section 158BC of the Act was issued directing to file return within fifteen days. The petitioner requested the department for supply

[2025:RJ-JP:4108-DB] (2 of 3) [CW-12651/2009] of copy of the seized documents. Return was filed on 19.08.1998. Interest of Rs.3,41,225/- under section 158BFA for delay in filing the return was levied on 29.11.2005. The application filed by the petitioner for waiver was rejected on 14/15.05.2009. The petitioner filed rectification application raising grievance that while rejecting waiver request, it was wrongly recorded that there was delay of two years in filing the return. The application for rectification was partly accepted. The prayer for waiver was rejected but it was recorded that there was delay of eleven months and twelve days in filing the returns. 3. Learned counsel for the petitioner submits that delay in filing the return was due to non-supply of copies of the seized documents and books of accounts. Contention is that inspite of the order making additions on the petitioner having been attained finality at the level of the Income Tax Appellate Tribunal (for short ‘ITAT’), seized share certificates and other documents have not been returned. 4. Per contra the copies of the documents were supplied to the petitioner in first week of September,1997 as is evident from letter dated 11.11.1997 written by the petitioner to the Assistant Commissioner of Income Tax, Jaipur. Submission is that in case the petitioner approaches the department for return of the documents the request would be considered in accordance with law. 5. Section 158BFA provides for levying of interest for delay in filing the return of total income including undisclosed income. The Section applies to cases of delaying filing of the return as also of non-filing of the return. At the relevant time simple interest

[2025:RJ-JP:4108-DB] (3 of 3) [CW-12651/2009] chargeable was @ 2% on undisclosed income. Interest is to be calculated from expiry of the period specified in the notice for filing of the return till date of completion of the assessment. 6. The petitioner had to file return within fifteen days from 22.08.1997 but return was filed on 18.08.1998. The stand of the petitioner that the copies of seized documents were returned in December,1997 is falsified by the communication of the petitioner dated 11.11.1997, wherein the petitioner submitted that the documents were returned in first week of September,1997. No explanation for the delay in filing the return up to 18.08.1998 was put forth. 7. There is no factual or legal mistake in the impugned order rejecting the request for waiver. 8. With regard to non-returning of the seized documents, this petition is disposed of with direction to the legal heirs of the petitioner to file an application for return of the seized documents and shall substantiate the documents seized and returned. 9. The CCIT, Jaipur shall consider the application in accordance with law and after providing an opportunity of hearing. The application be decided expeditiously but not later than two months from the date of the receipt of the certified copy of this order. If found entitled, the seized documents shall be returned within four weeks thereafter. (SHUBHA MEHTA),J (AVNEESH JHINGAN),J Simple Kumawat /01 Whether Reportable: Yes

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