A survey under s 133A was conducted and exercise note books were found in the course of survey mentioning some transactions by way of money lending business. The petitioner was said to have agreed to offer additional income and consequently in pursuance to notice under s 148, the petitioner filed returns of income for the AY’s 2000–2001 to 2005–2006 admitting the additional income. According to the petitioner, the entire income tax was paid. The main grievance of the petitioner was that the interest levied under s 234A, 234B and 234C was not paid since he was seeking waiver by making an application to the CCIT under s 119(2)(a). The CCIT rejected the application except giving relief by waiving interest under s 234A to the extent levied, retaining the levy of interest under s 234B and 234C. The petitioner filed application seeking rectification of the order passed. But, the same was rejected. Being aggrieved, the assessee has filed present appeal. Before the High Court, the counsel for the petitioner submitted that the CBDT’s Circular covers the power of the CCIT which he failed to exercise, much less, he had not assigned any reasons to opine that the assessee was not entitled for the exemption as per s 234B and 234C. The counsel for the Revenue submitted that the Circular did not apply to the case on hand. Therefore, it is for the petitioner to approach the Board under s 119.
The issue is whether the CCIT was justified in rejecting the assessee’s application seeking waiver of interest under s 234A, B & C without assigning any reasons while rejecting the petition.
It is a case of detection wherein the petitioner is said to have not assessed the income he was getting from the moneylending business. Without giving a finding on the issue whether the source of income had been accrued then and there or it is a future income on the money lending business, the impugned order passed by the CCIT appears to be vague in rejecting the case of the petitioner declining to exercise his discretion. It is for the petitioner to approach the Board under s 119 or else, to pay the interest as ordered. However, the petitioner is given two months and the Board is directed not to enforce recovery till then.
The issue is whether the CCIT was justified in rejecting the assessee’s application seeking waiver of interest under s 234A, B & C without assigning any reasons while rejecting the petition.
It is a case of detection wherein the petitioner is said to have not assessed the income he was getting from the moneylending business. Without giving a finding on the issue whether the source of income had been accrued then and there or it is a future income on the money lending business, the impugned order passed by the CCIT appears to be vague in rejecting the case of the petitioner declining to exercise his discretion. It is for the petitioner to approach the Board under s 119 or else, to pay the interest as ordered. However, the petitioner is given two months and the Board is directed not to enforce recovery till then.
The CCIT is required to pass reasoned order before rejecting the assessee’s application seeking waiver of interest under s 234A, 234B and 234C as held by KarHC in B Gajendra Kumar v Chief CIT and Anr — In favour of: Others; WP Nos 18397–18402/2010 (T-IT).
Decided on: 28 January 2011.
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