TaxTMI 
TaxTMI 
2009 (9) TMI 58
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....rect return of his total income including the undisclosed income in respect of which he is assessable for the block period commencing from 01.04.1986 ending 05.03.1997. The petitioner on 08.03.1999 furnished the return of income in Form 2B. After affording an opportunity of hearing, a block assessment order was passed under Section 158 BC of the Act for the block period from 01.04.1986 to 05.03.1997 by an order dated 31.03.1999 demanding a sum of Rs.4,00,968/- as tax. 3. The petitioner assailed the correctness of the assessment order by preferring an appeal before the Commissioner of Income Tax (Appeals)-VIII, Chennai in ITA No.392/1999-2000 on 13.08.1999 and the Commissioner of Income Tax (Appeals), by order dated 26.03.2001 granted relief to the petitioner and determined the income tax liability at Rs.3,71,415/-. The petitioner preferred further appeal to the Income Tax Appellate Tribunal, Chennai in IT(SS) A.No.75/MDS/2001 and the Tribunal by order dated 26.04.2005 held that the undisclosed investments was to the extent of Rs.1,75,000/-, for which the petitioner has to pay Rs.1,14,600/- as tax and Rs.55,008/- as interest under Section 158 BFA. According to the petitioner, he pa....
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....raph 9 as follows; " What is the status of these circulars? Section 119(1) of the income-tax Act, 1961 provides that, "The Central Board of Direct Taxes may, from time to time, issue such orders, instructions and directions to other income-tax authorities as it may deem fit for the proper administration of this Act and such authorities and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board, Provided that no such orders, instructions or directions shall be issued (a) so as to require any income-tax authority to make a particular assessment or to dispose of a particular case in a particular manner; or (b) so as to interfere with the discretion of the Appellate Assistant Commissioner in the exercise of his appellate functions". Under Ss.(2 of Section 119, without prejudice to the generality of the Board's power set out in Ss. (1, a specific power is given to the Board for the purpose of proper and efficient management of the work of assessment and collection of revenue to issue from time to time general or special orders in respect of any class of incomes or class of cases setting forth directions or ....
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....cases or class of incomes specified in paragraph 2 of the said order for the period and on conditions which are enumerated therein. He submitted that in view of the said circular, the same authority can be exercised by the Commission since the said circular would amount to relaxation of the rigor of sections 234A, 234B and 234C of the Act. We are in unison with this submission of the learned Solicitor General. This Court in a catena of cases has held that the circulars of the central board of direct taxes are legally binding on the revenue. See UCO Bank v. Commissioner of Income Tax (1999) 237 ITR 889). Since these circulars are beneficial to the assessees, such benefit can be conferred also on the assessees who have approached the settlement commission under Section 245C of the Act on such terms and conditions as contained in the circular. In our opinion, it is for this purpose that section 245F of the Act has empowered the settlement commission to exercise the power of an income -tax authority under the Act. We must clarify here that while exercising the power derived under the circulars of the board, the commission does not act as a subordinate to the board but will be enforcing....
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....ty before whom a petition is made, is bound to consider the circumstances warranting a rejection or a reduction. Devoid of reasons indicated for reduction, it is difficult to uphold the order of the first respondent. The first respondent had given the waiver of 50% as regards the interest chargeable under Sections 139(8), 215 and 217 of the Act. Considering the fact that the order does not disclose the reasons for restricting the waiver to 50% as regards the interest under 139(8), 215 and 217 of the Act and not considering the plea of waiver in respect of interest chargeable under Sections 234-A, 234-B and 234-C, we set aside the order of the first respondent, directing the first respondent to consider the claim of the assessee as regards the waiver of interest levied under the provisions stated above and pass afresh a considered order after giving sufficient opportunity in accordance with law." 10. The petitioner placed reliance on the Judgment of this Court reported in CDJ 2007 MHC 1533 (Kanchipuram Silk Handloom Wavers' Co-Operative Marketing Society Limited, v. The Commissioner of Income-tax, Chennai-VIII, Chennai & Others), which was also a writ petition filed challenging the....
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....617 (B. M. Malani v. Commissioner of Income Tax & Another), thereunder the Honourable Supreme Court was considering the validity of an order passed by the Commissioner of Income Tax rejecting the application of waiver under Section 220(2A), wherein the Honourable Supreme Court in paragraph 8 held as hereunder; "8....... However, another principle should also be borne in mind, namely, that a statutory authority must act within the four corners of the statute. Indisputably, the Commissioner has the discretion not to accede to the request of the assessee, but that discretion must be judiciously exercised. He has to arrive at a satisfaction that the three conditions laid down therein have been fulfilled before passing an order waiving interest. Compulsion to pay any unjust dues per se would cause hardship. But a question, however, would further arise as to whether the default in payment of the amount was due to circumstances beyond the control of the assessee." 13. The petitioner also placed reliance on an order passed by this Court in V. Akilandeswari v. The Chief Commissioner of Income Tax reported in CDJ 2009 MHC 2195, this Court after relying upon the decision of the Division Be....
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....fore, the learned Senior Standing Counsel for the department would submit that the petitioner failed to honour the opportunity given at different point of time and there has been a total non cooperation in the recovery proceedings, which is one of the conditions which are required to fulfill under Section 220(2A) and therefore, the petitioner is not entitled for any further indulgence. 16. Regarding the circular relied on by the petitioner, issued by the Central Board of Direct Taxes, dated 21.05.1996, the learned Senior Standing Counsel for the respondent would submit that the said circular is applicable only for waiver of interest under Section 234 of the Act and has no applicability to the present case. Further, the learned Senior Counsel would submit that the petitioner is a very prominent real estate developer and the plea raised by him for non payment of tax despite several indulgence granted to him is a supine indifference to pay tax and the Department was extra kind to the petitioner. Therefore, the respondent was fully justified in rejecting the claim. 17. I have carefully heard the submissions made by the learned counsel on both sides and considered the materials on rec....
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....ived, all the three conditions are to be satisfied. First of such condition being that payment of said amount would cause genuine hardship to the assessee. Lack of hardship or failure to establish financial difficulties, have been held not to be causes of genuine hardship and therefore not eligible for waiver. The second condition to be fulfilled is that the default in payment of tax is due to circumstances beyond the control of the assessee and the third condition is that the assessee has co-operated in any enquiry relating to the assessment or recovery proceedings. 22. This Court in P .Ramasamy v. Commissioner of Income Tax reported in 1999 (237) ITR held that pursuit of remedies available to the assessees under the Act cannot be construed as non co-operation with the department, unless the pursuit has been of a cantankerous nature, obstructive or evasive. 23. The Honurable Supreme Court in Krishan Lal v. Union of India reported in 1998 (230) ITR 85 held that when an application is filed under sub Section (2A) of 220 of the Act, the authority concerned is called upon to take a quasi-judicial decision and if it is satisfied that the reasons contained in the application would bri....
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....fficers report dated 27.07.2005 shows that the assessee has not honoured the installment payment provided by the Joint Commissioner of Income Tax, the assessee has not co-operated in the payment of installment granted and thus one of the conditions stipulated in clause (iii) of 220(2A) has not been fulfilled. Therefore, waiver application is rejected. 28. The learned counsel appearing for the petitioner would submit that due to genuine hardship and reason beyond the control of the petitioner, the tax could not be remitted. He would further submit that the fact that the installment was granted to the petitioner itself would establish that the department was prima facie satisfied that the petitioner was going through genuine hardship and that the default in payment of the amount of income tax was due to circumstances beyond the control. The learned counsel would further submit that the assessee had co-operated in the enquiry which had only resulted in the block assessment order being passed on 31.03.1999. Therefore, the learned counsel would submit that the petitioner had satisfied all the three conditions under the Statute. 29. The learned Senior Standing Counsel for the departmen....
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....the reasons for the order passed by the administrative authority be recorded in the order and be communicated to the aggrieved party and it may dispense with such a requirement. It may do so by making an express provision to that effect. Such an exclusion can also arise by necessary implication from the nature of the subject matter, the scheme and the provisions of the enactment. The public interest underlying such a provision would outweigh the salutary purpose served by the requirement to record the reasons. The said requirement cannot, therefore, be insisted upon in such a case. Therefore, except in cases where the requirement has been dispensed with expressly or by necessary implication, an administrative authority exercising judicial or quasi-judicial functions is required to record the reasons for its decision. The recording of reasons by an administrative authority serves a salutary purpose, namely, it excludes chances of arbitrariness and assures a degree of fairness in the process of decision-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. Therefore,....