INCOME TAX ACT, 1961

Section 220(2A) Article 226

Recovery - Reduction or waiver under section 220 - Interest waiver under section 220(2A) - Genuine hardship

Assessee had been regularly paying the taxes by way of advance tax and TDS and the demand made by the revenue for the two relevant assessment years was due as per sections 234A, 234B, 234C and under section 143(1)(a) adjustment only. The adjustment made under section 143(1)(a) had already been subject to 20% additional tax. Therefore, the tax due portion was very low, hence, levying further interest under section 220 was only an interest on interest and also as an additional due. Therefore, on these reasons and for further reasons of there was genuine hardship that the assessee faced in making the payment of the interest due as demanded by the revenue, such waiver application was made by the assessee by invoking section 226(2A) (sic-220(2A). Common application made by the petitioner seeking such waiver had been considered and rejected by the respondent/revenue, through the impugned Order, dated 12-8-2003. Challenging the said rejection order of the waiver application of the petitioner/assessee, two writ petitions were filed for the aforesaid relief. The respondent had come to the conclusion that the condition Nos. 1 and 2 had not been satisfied by the assessee and therefore, he was not entitled to seek for waiver under section 220(2A).Held: It had been specifically found by the revenue that, except the land and machineries, no property was available with the assessee. No liquid cash or deposit or share capital or debenture were found in the name of the assessee, even according to the revenue after having gone through the balance sheet. When that being so, by citing the reason, that the assessee was having land and machineries, his plea of genuine hardship can be rejected should not have been taken by the revenue. Reason cited by the Revenue in the impugned order, in the considered view of this court, cannot be considered to be a worthy reason for rejecting the plea made by the assessee for waiver. This Court was at loss to understand, as to how the Revenue had come to the conclusion that the assessee was not able to establish the case of genuine hardship cogently and clearly with reference to their books of accounts and cash availability. For all these reasons and discussions made in above, the impugned order was therefore, hereby quashed and consequently, the matter was remitted back to the respondent for re-consideration. While making such re-consideration, it was open to the respondent to seek for further materials/documents from the assessee.

Followed:Poom puhar Shipping Corpn. Ltd. v. Asstt. CIT (2017) 88 Taxmann.com 218 (Mad) : 2017 TaxPub(DT) 5440 (Mad-HC). Distinguished:K.C. Mohanan v. Chief CIT (2013) 30 Taxmann.com 376 (Ker) : (2013) 214 Taxman 127 (Mag) : (20`13) 350 ITR 461 (Ker) : 2013 TaxPub(DT) 630 (Ker-HC) and Mookambika Associates v. Asstt. CIT (2016) 76 Taxmann.com 333 (Karn) : (2017) 391 ITR 26 (Karn) : 2017 TaxPub(DT) 19 (Karn-HC).

REFERRED : B.M. Malani v. CIT (2008) 174 Taxman 363 (SC) : (2008) 306 ITR 196 (SC) : 2008 TaxPub(DT) 2326 (SC), Supreme Court of India, Equivalent. Mani v. CIT (2010) 190 Taxman 417 (Mad) : (2010) 320 ITR 472 (Mad.) : 2010 TaxPub(DT) 780 (Mad-HC), Benara Valves Ltd. v. CCE 2006 (204) ELT 513 (SC) : 2006 TaxPub(EX) 2532 (SC). and Chief CIT v. Ranikant & Sibs (2017) 83 Taxmann.com 162 (Mad) : (2017) 249 Taxman 122 (Mad) : (2017) 396 ITR 171 (Mad) : 2017 TaxPuv(DT) 1962 (Mad-HC).

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