While disposing a petition by Mr. Anandakumar, the single bench of Madras High Court has observed that, When an Assessee is a student in Assessment Year and resulted delay in payment of Taxes considered to be unavoidable circumstances for delay in filing Income Tax return.
The petitioner has challenged the order passed by the The Chief Commissioner of Income Tax Tiruchirappalli, dated 30.03.2004, has denies the waiver of interest chargeable under sections 234B and 234C of the Income Tax Act, 1961.
The application submitted by the petitioner for waiver of interest under Section 234A of the Income Tax Act was favourably considered by the respondent and the respondent found that the petitioner was a student till 1990 and only after he finished his studies, he involved himself in the business activities of the firms, in which he was a partner and came to know of the fact that due to the delay in getting the share income particulars from the firms, there was a delay in filing his individual return of income for the assessment year 1988-89 to 1991-92.
Justice T S Sivagnanam has relied division bench decision of Gujarat High Court in the case of VINODCHANDRA C.PATEL v. CIT, which pointed out that when circumstances resulting into late payment of taxes and when the same set of circumstances are considered to be unavoidable circumstances responsible for the delay in filing the return of income, ordinarily, such circumstances would also qualify to be considered to be unavoidable circumstances responsible for the delay in the late payment of taxes. Referring to the Notification dated 23.05.1996, it was pointed out that the powers conferred on the Chief Commissioner of Income Tax/ Director General of Income Tax to waive interest charged under sections 234A, 234 B or 234C of the Act and the classes of cases of classes of income specified in para 2 of the said order. It was pointed out that condition precedent is that reduction or waiver of such interest can be ordered only after the assessee has filed the return of income for the relevant assessment year and paid the entire tax due on the income as assessed except the amount of interest for which reduction or waiver has been requested for.
Justice T S Sivagnanam also observed that, the said case, it was pointed out that if the circumstances have been considered to be unavoidable circumstances for the purpose of waiver of interest under section 234A, in the facts of the case, the same would have to be considered as unavoidable circumstances for the purpose of reduction/waiver of interest under sections 234B and 234C as well. Accordingly, whatever waiver granted under section 234A, shall also be extended with regard to waiver of interest under sections 234B and 234C of the Act.
While directing to grant waiver of interest under sections 234B and 234C of the Income Tax Act the bench also found that, the petitioner has made out a case for waiver of interest under section 234A of the Act and the respondent recorded that it is a reasonable cause for delay in filing the return of income.
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