YASHRAT N BHATT Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner had filed a return of income for the asst. year 1979 80 on 30th Aug., 1979, declaring the income of Rs. 81,610. The same was accepted by respondent No. 1 and an assessment order dt. 4th Aug., 1981, was passed. It is the say of the petitioner that prior to submission of return the petitioner had paid advance tax by three instalments estimating his income for asst. year 1979 80 at Rs. 22,920 on the basis of the order passed by respondent No. 1. It is his further contention that the books of accounts of the firms in which the petitioner is a partner were not closed and adjusted upto 15th Dec., 1978, by which he should have submitted the estimate as provided under S. 212 (3A) of the IT Act (' the Act', for short) and, therefore, he was under the bona fide impression that his shares of profit in the said firms would be more or less equal to the income falling to his share in the preceding year. Subsequently, after receipt of details, sometime in the last week of August, 1979, he had submitted his return showing the total income at Rs. 81,610. He further submitted that this increase in income was on account of increase in business of the said firms in the assessment year under reference. He has further submitted that he had paid Rs. 29,626 on 14th Aug., 1981, as tax under S. 140A of the Act. The petitioner thereafter filed an application on 17th Oct., 1981, before respondent No. 1 for waiving interest under r. 40 of the IT Rules, 1962 ('the Rules' for short) as assessment in his case was completed after lapse of more than one year after submission of return on 30th Aug., 1979, by contending that the delay of 11 months and 4 days in assessment was not attributable to the petitioner. Respondent No. 1, however, by his order dt. 27th Aug., 1982 (Annexure "A/2"), rejected the application filed by the petitioner for waiver of interest and directed him to pay interest of Rs. 9,533.

(2.) THE petitioner filed a revision application under S. 264 of the Act before respondent No. 2 praying, inter alia, that the order (Annexure "A/2") be reversed and interest amount of Rs. 8,671 be waived entirely. That revision application was rejected by respondent No. 2 by his order dt. 9th Sept., 1983 (Annexure "A/8") passed by the ITO, Circle I, Ward B, Rajkot, rejecting his application for waiver of interest.

(3.) IN our view, the submission made by the learned counsel for the petitioner requires to be accepted. The orders (Annexures A/2 and A/8) passed by the authorities below are without assigning any reasons. Similarly, the order (Annexure A/6) passed by the CIT also requires to be set aside because he has not taken into consideration the provisions of r. 40 before rejecting the revision application filed by the petitioner for waiver of interest. The CIT has not considered the contention raised by the petitioner that, in any set of circumstances, the delay in assessment was not attributable to the assessee and, therefore, the interest should be waived under r. 40. Considering the facts stated in the order passed by the CIT, it is apparent that the CIT has not assigned any reasons as to why provisions of r. 40 are not applicable to the facts of the present case.