SUBHAKARAN N Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE challenge in this writ petition is against the imposition of interest under Section 139(8) and Section 215 of the Income-tax Act, 1961, for belated filing of return and non-payment of advance tax against the orders passed by the Inspecting Assistant Commissioner of Income tax and the Commissioner of Income-tax on petitions filed under Rule 40(6) and Rule 117A of the Income-tax Rules, refusing to waive the interest in full.

(2.) FOR the assessment year 1983-84, the petitioner filed his return on January 30, 1085, disclosing his total income at Rs. 52,418 stated to be the share incomes from four firms of which one is D. K. B. and Company, Quilon. The income returned was based on the share income of the firms as originally disclosed in the return. We are not concerned with the other firms except D. K. B. and Company, for, only the income disclosed by that firm proved to be erroneous. The petitioner filed the return based on the figures furnished by that firm. But, consequent on a raid, that firm filed a revised return on April 2, 1985, disclosing a further sum of Rs. 41 lakhs. which was accepted by the third respondent, Income-tax Officer, and the assessment of the firm was made on April 11, 1985. Thereafter, the petitioner's assessment was completed by the third respondent making suitable additions to the share income disclosed by the petitioner from D. K. B. and Company, Quilon, on the basis of the revised return filed by that firm. The assessment was completed on the petitioner on a total income of Rs. 3,64,250, In completing the assessment, the third respondent levied interest under Section 139(8) amounting to Rs. 34,897 and interest under Section 215 amounting to Rs. 55,048. The levy of interest was occasioned only because of the enhanced share income from D. K. B. and Company, Quilon, adopted for the assessment year 1983-84. On receipt of the assessment order, the petitioner approached the second respondent for waiver of interest charged under Section 139(8) and under Section 215 of the Income tax Act. The Inspecting Assistant Commissioner, by his order dated July 15, 1987, waived 50 per cent. of the interest charged under Section 139(8) and 25 per cent. of the interest charged under Section 215 of the Act. The assessment order is produced by the petitioner as exhibit P-2 and the order of the Inspecting Assistant Commissioner reducing the interest as above is produced as exhibit P-3. The petitioner, thereafter, filed a revision petition against the order, exhibit P-3, before the first respondent Commissioner of Income-tax, and the first respondent confirmed the levy of interest and dismissed the revision petition. The order of the Commissioner is produced as exhibit P-4. It is the said orders, exhibits P-2, P-3 and P-4, that are challenged in this writ petition.

(3.) SIMILAR statement regarding Section 139 interest is also made restricting interest under that section to 50 per cent. Even though several contentions have been raised in the revision petition, the Commissioner of Income tax only stated that the Income-tax Officer/Inspecting Assistant Commissioner has already reduced the interest by 25 per cent. Moreover, the entire interest payable by the firm has also been waived by the Income-tax Officer/Inspecting Assistant Commissioner and that any further reduction in the interest levied under Section 139 or 215 is inappropriate.