MANI Vs. COMMISSIONER OF INCOME TAX-I

JUDGEMENT

(1.) THE petitioner has filed the above writ petition for issuance of a Writ of Certiorarified Mandamus to quash the order of the respondent dated 06.03.2006 and for a consequential direction to allow the petition for waiver of interest filed by the petitioner on 18.07.2005.

(2.) THE petitioner, an income tax assessee, is engaged in the business of collecting entrance fees from the markets controlled by the Melur Municipality, Madurai District. He is also a civil contractor and a real estate agent and also carrying on agricultural operations. A search was conducted by the Income Tax department on 05.03.1997 in the business premises of the petitioner. Consequent upon search and seizure operation a notice under Section 158BC of the Income Tax Act (in short, Act) was issued on 31.03.1997, requiring the petitioner to prepare a true and correct 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 158BC 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 has questioned the impugned order on the ground that the dismissal of the claim of the waiver of interest is irrational and irrelevant, because it is an admitted fact that the petitioner has honoured the entire tax liability as well as the interest portion by paying in 8 installments ranging from 04.02.2004 to 24.06.2005. It is further stated by the petitioner that the respondent failed to appreciate properly the scope of Section 220(2A) of the Income Tax Act, 1961, more particularly Clauses (ii) and (iii) and stated that the condition in Clause (iii) is squarely applicable to the petitioner and the respondent erred in not granting the waiver of interest. It is further stated that the payment of the tax as well as the interest under Section 158BFA in 8 installments would establish that the petitioner fully cooperated in the enquiry and recovery proceedings, which entitles him to get waiver of interest under Section 220(2A) of the Act.