M/S SRI SIVAPRIYA SHELTERS PVT LTD vs. THE DEPUTY COMMISSIONER OF INCOME

1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 11TH DAY OF MARCH 2013 PRESENT THE HON'BLE MR. JUSTICE N.KUMAR AND THE HON'BLE MR. JUSTICE B.MANOHAR ITA No.369/2012 c/w ITA No.370/2012 ITA No.369/2012: BETWEEN : M/S SRI SIVAPRIYA SHELTERS PVT LTD 71, 2ND FLOOR, 2ND CROSS, R J GARDEN, OUTER RING ROAD MARATHAHALLI, BANGALORE REPRESENTED BY ITS SRI JAGADEESWARA REDDY MANAGING DIRECTOR AGED ABOUT 57 YEARS S/O LATE SRI VENUGOPALA REDDY. APPELLANT ( By Sri SARANGI, Sr. Cl. FOR Sri K S RAMABADRAN ADV.)

2 AND : THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2 (3), BANGALORE. RESPONDENT This ITA is filed U/s.260-A of I.T.Act, 1961 arising out of Order dated 29-06-2012 passed in ITA No.1450/Bang/2010, for the Assessment Year 2005-2006. ITA No.370/2012: BETWEEN : M/S SRI SIVAPRIYA SHELTERS PVT LTD 71, 2ND FLOOR, 2ND CROSS, R J GARDEN, OUTER RING ROAD MARATHAHALLI, BANGALORE REPRESENTED BY ITS SRI JAGADEESWARA REDDY MANAGING DIRECTOR AGED ABOUT 57 YEARS S/O LATE SRI VENUGOPALA REDDY. APPELLANT ( By Sri SARANGI, Sr. Cl. FOR Sri K S RAMABADRAN ADV.) AND : THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2 (3), BANGALORE. RESPONDENT

3 This ITA is filed U/s.260-A of I.T.Act, 1961 arising out of Order dated 29-06-2012 passed in ITA No.1449/Bang/2010, for the Assessment Year 2004-2005. These appeals coming on for admission this day, N KUMAR J, delivered the following: JUDGMENT These appeals are preferred by the assessee challenging the order passed by the Tribunal rejecting to grant any relief under Section 234A and B of the Income Tax Act, 1961 (for short `Act'). 2. The grievance of the assessee was that the seized materials were made available only in July, 2009 after repeated requests and therefore the returns u/S 153A of the Act were filed only on receipt of the seized material. The Revenue cannot charge interest for the aforesaid delay. However the Tribunal relied on the judgment of the Apex Court in the case of M S Ghaswala 251 ITR 1 (SC) and held that the assessee has not brought any material on record to show that the absence of seized material or the

4 fact that there was a delay on the part of the revenue in giving the seized material was the reason for the delay in filing the return of income. Therefore, they declined to interfere with the order imposing interest reserving liberty to the assessee to approach the Authorities for waiver of interest, if they so desire. Aggrieved by the said order, these appeals are filed. 3. Learned counsel appearing for the assessee submitted that the Tribunal ought to have considered the reasons for the delay in filing the return as held by this Court in the case of T P Indrakumar -vs- ITO ITA No.596 of 2004 wherein this Court has held that under Section 234-A and B interest cannot be charged. 4. Section 234A of the Act deals with interest for defaults in furnishing return of income, whereas Section 234B deals with interest for defaults in payment of advance tax. This is based on the principle that whenever the tax is

5 not paid on due date or return is not filed within the time prescribed, the Revenue is deprived of the tax and the assessee would have the benefit of the said amount. Therefore, the interest is levied to compensate for such loss. In regard to the aforesaid judgment in the case of T P Indrakumar -vs- ITO this Court has observed that to buy peace and avoid further adverse consequences and the Assessing Authority having acted upon this proposition of the assessee and having regard to the peculiar facts and circumstances of this case, the addition of income under sections 234A and 234B in the case of the assessee was not necessary and not justified. However, in this case, the delay in filing the return was on account of the seized materials not being returned to the assessee and if the said materials were very much available for filing return under Section 153A of the Act. Then it is open to the assessee to approach the Revenue Authorities for waiver of interest. Even after making out a case for waiver and the waiver is

6 not granted by the Authorities, then it could be said that the assessee is aggrieved and then he can approach this Court. As rightly pointed out by the Tribunal that no material is brought on record to show that the absence of seized materials or the fact that there was a delay on the part of the Revenue in giving the seized material was the reason for the delay in filing the return of income, the assessee cannot be granted any relief as prayed for. In that view of the matter, we do not see any substantial question of law which arises for consideration in these appeals on merits, admission and consideration. The appeals are dismissed accordingly. Sd/- JUDGE Sd/- JUDGE bkm.