VIJAYKUMAR DEVRAJ MEHTA vs. THE CHIEF COMMISSIONER OF INCOME TAX and ANR.

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WP/7539/2004HC BombayHCBM01023125200425 October 2004Bench: HON'BLE SHRI JUSTICE J.P. DEVADHAR,HON'BLE SHRI JUSTICE R.M. LODHA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the impugned order of the Chief Commissioner of Income Tax, rejecting the petitioner's application for waiver of interest, did not call for any interference. The Court found that the Chief Commissioner's observation that the assessee had earned income which he failed to disclose in the return of income was unassailable. Consequently, the application for waiver of interest was liable to be rejected. The Court also noted that the petitioner's case was not covered by any of the clauses of the CBDT notification dated May 23, 1996, upon which the petitioner's counsel placed strong reliance, specifically finding that clause (c) of the notification was not attracted in light of the facts. The writ petition was dismissed in limine.

What were the facts?

The petitioner, Shri Vijaykumar Devraj Mehta, is challenging an order dated February 17, 2003, passed by the Chief Commissioner of Income Tax, which rejected his application for waiver of interest levied under Sections 234A, 234B, and 234C of the Income Tax Act. A survey under Section 133A was conducted on November 16, 1994, at the petitioner's premises, leading to a declaration of Rs. 10,00,000/- as additional income for assessment year 1994-95. The return was filed on March 20, 1995. The Assessing Officer assessed the total income at Rs. 70,97,360/- on March 27, 1997. The Commissioner of Income Tax (Appeal) modified the total income to Rs. 12,14,430/- on March 30, 1998. Consequently, a demand notice for Rs. 9,21,059/-, including Rs. 4,00,514/- as interest under Sections 234A, 234B, and 234C, was issued on May 4, 1998. The petitioner applied for waiver of this interest on February 18, 1999.

What were the issues?

1. Whether the Chief Commissioner of Income Tax was justified in rejecting the petitioner's application for waiver of interest levied under Sections 234A, 234B, and 234C of the Income Tax Act, considering the facts of the case and the applicability of CBDT notification dated May 23, 1996. Assessee's Contention: The petitioner relied on the CBDT notification dated May 23, 1996, for waiver of interest. The judgment does not explicitly detail the petitioner's specific arguments beyond reliance on this notification. Revenue's Contention: The revenue's position, as reflected in the Chief Commissioner's order and upheld by the High Court, was that the assessee had earned income which was not disclosed in the return, making the waiver application liable for rejection. The revenue argued that clause (c) of the CBDT notification was not attracted.

Which sections of the Income-tax Act were involved?

Section 133A,Section 234A,Section 234B,Section 234C

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE SIDE

WRIT PETITION NO.7539 OF 2004

Shri Vijaykumar Devraj Mehta

Petitioner

vs.

1.The Chief Commissioner of

Income Tax & anr.

Respondents

Mr.Vipul Joshi with Mr.Piyush Shah for the petitioner.

Mr.R.V.Desai, senior counsel along with Ms.S.V.

Bharucha for the respondents.

CORAM : R. M. LODHA &

J.P. DEVADHAR,JJ.

DATED : 25th October 2004

P.C.

Heard

Mr.Vipul Joshi, the learned counsel for

the

petitioner

and

perused the order dated

17th

February

2003

passed

the Chief Commissioner of

Income

Tax

rejecting

the

petitioner’s application for

waiver

interest

levied

under Sections 234A, 234B and 234C

the

Income Tax Act.

It is not in dispute that on

16th

November

1994

survey action under Section 133A of

the

Income Tax Act was carried out at the office premises of

the petitioner and the petitioner declared the amount of

Rs.10,00,000/-

as additional income for the

assessment

year

1994-95.

On 20th March 1995, the return of income

for

assessment year 1994-95 was filed by the petitioner

declaring total income at Rs.10,45,345/-.

The assessing

officer

made

various additions and

disallowances

and

assessed

the

total

income

Rs.70,97,360/-

vide

assessment

order

dated

27th

March

1997.

The

Commissioner

Income Tax (Appeal) partially

allowed

the petitioner’s appeal and modified the total income of

the

petitioner by its order dated 30th March 1998.

compliance

the order of the Commissioner of

Income

Tax

(Appeals) the assessing officer passed an order

4th May 1998 revising the total income of the petitioner

Rs.12,14,430/-

and

issued

notice

demand

for

Rs.9,21,059/-

including

interest under sections

234A,

234B

and

234C

amounting

Rs.4,00,514/-

The

petitioner made an application to the Chief Commissioner

Income

tax for waiver of interest on 18th

February

1999.

The said application came to be rejected by

the

Chief

Commissioner

of Income Tax vide impugned

order.

The

Chief Commissioner of Income Tax observed that

the

assessee

had

already earned income which he failed

disclose

the

return

income.

The

aforesaid

observation

unassailable

and in view

thereof

the

application

made

the

petitioner

for

waiver

interest

was

liable to be rejected.

The

petitioner’s

case

was not covered by any of the clauses of the

CBDT

notification

dated

23rd

May 1996

upon

which

strong

reliance

was

placed

by the learned

counsel

for

the

petitioner.

find

that in the light of

the

facts

obtaining in the present case, clause (c) of the

aforesaid notification is not attracted.

2.

The impugned order does not call for any

interference.

3.

Writ petition is dismissed in limine.

(R.M. (R.M. (R.M. LODHA,J.) LODHA,J.) LODHA,J.)

(J.P. (J.P. (J.P. DEVADHAR,J.) DEVADHAR,J.) DEVADHAR,J.)

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