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2016 DIGILAW 45 (KER)

ARUN SUNNY v. CHIEF COMMISSIONER OF INCOME TAX

2016-01-14

ANU SIVARAMAN, THOTTATHIL B.RADHAKRISHNAN

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JUDGMENT : Thottathil B.Radhakrishnan, J. 1. Appellant impugns the dismissal of his writ petition challenging an order passed by the Chief Commissioner of Income Tax under Section 119(2) (a) of the Income Tax Act, 1961; 'Act' for short. 2. Appellant sold an item of property. The computation of capital gains referable to that transaction resulted in an assessment order, leading to, among other things, consequential levy of interest under section 234B of the Act. He applied before the Chief Commissioner seeking waiver of interest so levied. That was turned down. It stands confirmed by the learned single Judge through the impugned judgment. 3. It is pleaded on behalf of the appellant that he was eligible to the benefit of Ext.P3(a) notification dated 23.5.1996 and that Ext.P3(b) is only a communication, not amounting to a notification of an order under Section 119(2)(a) of the Act. So saying, it is argued that since the assessee voluntarily filed the return, without detection by the assessing officer, and since the return could not be filed by him due to unavoidable circumstances, the appellant was entitled to an order in his favour under Section 119(2)(a). It is argued that, hence, the appellant was entitled to waiver of interest as sought for by him. Reliance is placed on Ext.P3 (a) to denounce the legal effect of Ext.P3(b) as a notification under Section 119(2)(a) of the Act. To buttress the plea that he was entitled to an order in his favour at the hands of the Chief Commissioner, the appellant attempted to show that there are intrinsic distinctions between the terms of Exts.P3(a) & P3(b). 4. Per contra, the learned standing counsel for the Department pointed out that it is Ext.P3(b) which applied to the relevant period and there is wide variation between its terms and those of Ext.P3 (a). 5. Adverting to the reliance placed on behalf of the appellant to the decision of this Court in Chief Commissioner of Income Tax and another v. Jimmichan M. Varicatt [(2011) 330 ITR 338 (Kerala)], the learned single Judge; in our view, quite rightly; held that the said decision does not govern the case in hand and the assessee's situation is not one on account of any dispute with respect to the legal position that the assessee failed to pay the tax on long term capital gains. For the reasons stated in paragraph 12 of the impugned judgment, the learned single Judge held that the assessee's case is not an instance where the return of income was not filed, due to unavoidable circumstances, which is the context taken into account by clause 2(d) of the notification and that the assessee had filed a return disclosing the sale of landed property in the previous year, relevant to the assessment year; but had not returned any liability to taxes on capital gains. We agree with such finding of the learned single Judge. We affirm it. 6. The plea on behalf of the appellant that Ext.P3 (b) does not evidence an order under Section 119 (2)(a) is unsustainable for reasons more than one. Ext.P3(b) is an order shown to have been issued by the Central Board of Direct Taxes; 'CBDT' hereinafter; in exercise of the powers conferred under clauses 2(a) of Section 119 of the Act. It is wholly unacceptable to say that it is not an order under that provision but only a communication, unless, of course, reliable cogent material is produced by the appellant to denounce the credibility of Ext.P3(b). That document expresses the decision of the CBDT and contains directions to the Chief Commissioners and Directors General of Income Tax requiring compliance of the decision contained in that order. It is a statutory order. There is no way to escape from that legal position. Hence, we repel the plea of the appellant that it is not Ext.P3(b) that would apply. 7. That Ext.P3(b) order of CBDT was communicated to the Chief Commissioner of Income Tax, Kochi, is beyond any pale of doubt because what the appellant has produced as Ext.P3(b) is nothing but the photostat copy of what would be available in the Office of the Chief Commissioner of Income Tax, Kochi. We cannot but infer so since Ext.P3 (b), at the top of its first page, contains the seal of that office, imposed on 31.7.2006. 8. The learned counsel for the appellant made a last, but extremely persuasive, submission that on the totality of the facts and circumstances of the case and weighing the claim of the appellant vis-a-vis the interest of the exchequer, an equitable decision may be rendered by this Court by tapering down the appellant's liability; at least by ordering partial waiver of the interest component. Grant of waiver is a statutory matter. Grant of waiver is a statutory matter. The Chief Commissioners cannot exercise that power except in accordance with directions which are issued by the CBDT. When the regulatory mechanisms in a fiscal legislation govern a situation; that cannot be visited in exercise of power under Article 226 and appellate jurisdiction through an intra-court appeal since that would be in defeasance of the statutory impact of a fiscal legislation in the nature of the Income Tax Act, 1961. An "equitable remedy" cannot be carved out in defeasance of; and eroding the statutory situation. No such plenary power rests with the High Court to criss-cross the impact of the relevant fiscal statutory provisions; more so since, in law, equity would be subservient to; and, cannot override; statute. 9. For the foregoing reasons, we find no factual or legal infirmity in the impugned judgment warranting interference through this intra-court appeal under Section 5 of the High Court Act. In the result, this writ appeal is dismissed. No costs.