TaxTMI 
TaxTMI 
2020 (2) TMI 1182
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....and adjusted the TDS of Rs. 22,635/- in their returns. The assessment was completed on 16.03.1998. On appeal the Commissioner of Income Tax (Appeals) by an order dated 13.03.1999 remanded the case back for re-computation. 4. Pursuant to the said remand, an order dated 14.09.2000 came to be passed by the Joint Commissioner of Income Tax and a total income of Rs. 1,09,32,490/- was assessed in the hands of the petitioner. Accordingly, the income payable by the petitioner was determined at Rs. 50,28,945/- and after adjusting the payment already made, the petitioner was required to pay a sum of Rs. 11,31,310/-. The petitioner has accepted the same and was also asked to pay interest under Section 234B and Section 234C of the Income Tax Act, 1961. 5. For the Assessment Year 1996-97, the original assessment was completed on 25.03.1999. The assessment was reopened pursuant to a notice dated 13.06.1999 issued under Section 148 of the Income Tax Act, 1961. The said proceeding culminated in a revised order of assessment dated 26.03.2002. As against the net loss of Rs. 10,244/-, a positive income of Rs. 67,80,870/- was arrived in the said proceedings. The tax liability was determined as Rs. 3....
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....s 391-394 of Companies Act, 1956 and after that the petitioner company has been revived and the tax that was re-determined pursuant order dated 14.09.2000, 26.03.2002 and 26.03.2002 respectively were paid to the credit of the Income Tax Department on 27.01.2007. 10. It is therefore submitted that when the orders were passed pursuant to remand for the Assessment Year 1995-96 and pursuant to reopening of the assessment under Section 148 of the Income Tax Act, 1961, nobody represented the interests of the petitioner company. With great difficulty the petitioner company has been revived pursuant to order passed by this court on 27.10.2006 in C.P.No.146 of 2006 under Section 391-394 of the Companies Act, 1956. 11. The 1st respondent has rejected the application filed for waiver of interest on the ground that the case of the petitioner did not fall within any of the circumstances specified in the Central Board of Direct Taxes Notification dated 26.06.2006 bearing reference F.No.400/29/2002-IT(B). 12. In the impugned order, it has also been stated that the petitioner had sufficient liquidity to pay the advance tax and income tax and therefore it cannot be stated that the petitioner had....
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....Act, 1961 has been incorporated to grant waiver from payment of interest in case of genuine hardship. Therefore, the Central Board of Direct Taxes has given power to issue instructions and direction to be followed while granting waiver of interest. 18. This power is either exercised by the Board and/or by senior officers of the Income Tax Department like the first respondent. CBDT's Notification dated 26.06.2006 bearing reference No.400/29/2002-IT(B) which is relevant to the facts of the present case, reads as under:- 2.The class of incomes or class of cases in which the reduction or waiver of interest under section 234A or section 234B or, as the case may be, section 234C can be considered, are as follows : (a) Where during the course of proceedings for search and seizure under section 132 of the Income-tax Act, or otherwise, the books of account and other incriminating documents have been seized, and the assessee has been unable to furnish the return of income for the previous year, during which the action under section 132 has taken place, within the time specified in this behalf, and the Chief Commissioner/Director General is satisfied, having regard to the facts and circu....
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....uation like the present case where an assessee is legally incapacitated from making any payments as it was ordered to be wound up. It was under a legal disability. 21. Though the notification has not considered the above situation, I am of the view that the petitioner is entitled for a partial relief for the above reason dehors the above notification. The date of winding up dates back to the date of petition and during the aforesaid period, there was a legal disability to pay the tax by the company as the official liquidator obtained leave of the company court under the Companies Act, 1956. 22. Since the 1st respondent has no power to grant waiver of interest in the light of the specific instruction of the Central Board Of Direct Taxes, the Court in the exercise of its power under Article 226 of the Constitution of India can order waiver applying the legal principles applicable in the case of winding up of a company, 23. The effect of an order of winding up is to put the company into the hands of the official liquidator for completing the process of liquidating it. Till an order of the Court for distribution of the company's assets is obtained and assets are distributed, the pro....
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....tioner company. Perhaps, no steps were taken by the Income Tax Department to recover the arrears of tax which came to be determined since the petitioner company was ordered to be wound up. 30. Since the company was ordered to be wound up by the creditors, attempts were also made to settle the dues of the various creditors by reviving the company. Under these circumstances, C.P.No.146 of 2006 was filed under Sections 391-394 of the Companies Act, 1956. 31. In this proceeding also wide publicity would have been given by way of advertisement under Company Court Rules. It was open for Income Tax Department to participate by either supporting or opposing the compromise to protect its interests. However, it appears that the Income Tax Department also failed to participate in the said proceeding. 32. Eventually, an order was passed on 27.10.2006 in C.P.No.146 of 2006. By the said order, a scheme of arrangement for reconstruction and revival of operation of the petitioner company was ordered so as to bind on all the secured creditors, unsecured creditors, depositors and members of the petitioner company. It is only pursuant to the aforesaid order that the Official Liquidator was directe....