ORDER : P.Sam Koshy, J. 1. Heard Ms. Anjali Agarwal, learned counsel for the petitioners; and Ms. B. Swapna Reddy, learned Senior Standing Counsel for Income Tax Department appearing on behalf of the respondents. 2. The instant writ petition under Article 226 of the Constitution of India has been filed by the petitioner assailing the order dated 29.03.2007, in Proceeding F.NO.CC/Tech-I/40(2103)/05-06, passed by respondent No.1 as illegal, unjustified, and contrary to the guidelines given by the CBDT in Circular No.400/29/2002-IT (B), dated 26.06.2006. 3. The facts of the case are that the petitioners were subjected to reassessment proceedings under Section 147 of the Income Tax Act, 1961 (for short ‘the Act’) for the assessment year 1992-1993 on 08.05.2002, for the assessment years 1993-1994 and 1994- 1995 on 23.05.2001, for the assessment years 1995-1996 to 1997- 1998 on 28.05.2001, and for the assessment year 1998-1999 on 25.03.1998. Notices under Section 148 the Act were issued between the years 2001 and 2002 for various assessment years. The petitioners had originally filed their returns of income on different dates. The petitioner No.1 filed returns for the assessment year 1992-93 on 28.01.2003, for the assessment year 1993-94 on 09.11.1995 and for the assessment year 1994-95 on 16.11.1995. The petitioner No.2 filed returns for the assessment years 1995-96, 1996-97, and 1997-98 on 19.09.1997, and for the assessment year 1998-99 on 31.10.1998. 4. The original assessment proceedings were completed in 31.03.2003, wherein the total income assessed was Rs.25,09,156/-. Subsequently, reassessment orders were passed on 19.04.2005 following the directions of the Income Tax Appellate Tribunal which had remanded the matter back to the Assessing Officer. In the reassessment orders passed on 19.04.2005, the total income was reduced to Rs.16,10,987/-. The petitioners accepted these reassessment orders and paid the entire tax liability as determined by the Department with an intention to buy peace and avoid prolonged litigation. However, the petitioners contested the levy of interest charged under Sections 234A, 234B and 234C of the Act. 5. The petitioners filed a waiver petition before respondent No.1 seeking waiver of the interest levied under Sections 234A, 234B, and 234C stating that interest should only be levied from the last date for filing returns for each assessment year till the actual date on which the returns were filed, and not till the date of reassessment in the year 2005. The petitioners filed a waiver petition before respondent No.1 seeking waiver of the interest levied under Sections 234A, 234B, and 234C stating that interest should only be levied from the last date for filing returns for each assessment year till the actual date on which the returns were filed, and not till the date of reassessment in the year 2005. The respondent No.1, vide order dated 29.03.2007, rejected the waiver petition filed by the petitioners. The rejection was based on the observation that there was substantial variation between the incomes originally returned by the petitioners and those assessed thereafter by the Department. 6. The petitioners, being aggrieved by the order passed by respondent No.1 and having been left with no alternative and efficacious remedy filed the present writ petition. 7. Learned counsel for the petitioners contended that the petitioners operated a partnership firm dealing with construction activities at Himayatnagar, Hyderabad. Following the death of one partner, petitioner No.1 firm was dissolved and petitioner No.2 became the sole proprietor. The lessor firm, M/s.Shashi Enterprises (Shashi Kwatra wife of petitioner No.2), was similarly dissolved and taken over by the petitioner No.2. Both entities filed their income tax returns regularly which were acknowledged by the Department. On 25.03.1998, a survey was conducted under Section 133A of the Act at their premises in Himayatnagar, during which no adverse material was found. However, on 31.03.2003, the respondent No.3 completed assessments for the years 1992-93 to 1998-99 by adopting arbitrary rates of construction based on his own estimation, without proper justification. 8. Subsequently, when the Commissioner of Income Tax (Appeals) confirmed the assessment order, the petitioners appealed to the Income Tax Appellate Tribunal, which vide order dated 18.02.2004 remanded the matter to respondent No.3 with directions to determine the ALV and conduct reassessment after considering additional evidence. 9. Following the Income Tax Appellate Tribunal's directions, the respondent No.3 completed reassessments for the years 1992-93 to 1998-99 on 19.04.2005. The petitioners cooperated fully, producing all necessary documents during the reassessment process and accepting the Annual Letting Value (ALV) determined by the officer under Section 22 of the Act to maintain peace with the Department. Notably, the total income, which was initially assessed at Rs.25,09,159/- in the original assessment, was reduced to Rs.16,10,987/- in the reassessment order. The petitioners did not dispute or challenge this reassessment order. Notably, the total income, which was initially assessed at Rs.25,09,159/- in the original assessment, was reduced to Rs.16,10,987/- in the reassessment order. The petitioners did not dispute or challenge this reassessment order. However, the respondent No.3 charged interest under Section 234A of the Act for delay in filing returns, 234B of the Act for non- payment of advance tax, and 234C of the Act for deferment of advance tax payments, for all seven assessment years, totaling Rs.12,41,690/-, while the actual tax liability was only Rs.5,03,851/-. The petitioners paid the entire tax liability but contested the interest charges. 10. Further, the learned counsel for the petitioner contended that on 06.02.2006 the petitioners filed a waiver petition before the respondent No.1 seeking waiver of the interest aggregating to Rs.12,41,690/- levied under sections 234A, 234B, and 234C for the seven assessment years. Moreover, the learned counsel for the petitioner contended that the petitioners submitted detailed written statements explaining the merits of their case and demonstrating that they fulfilled the conditions specified in the CBDT’s Circular dated 23.05.1996, which empowered the Chief Commissioner to grant waivers in deserving cases. However, while the waiver petition was pending, the CBDT issued a new Circular No. 400/29/2002-IT superseding the earlier circular. Without properly appreciating the facts and circumstances of the petitioners' case the respondent No.1 rejected the waiver petition on 29.03.2007, under Section 119(2)(a) of the Act, on the ground that the petitioners did not satisfy any condition of the CBDT. He contended that this rejection is legally unsustainable in light of the Gujarat High Court's decision in Bhanubeen Panchal and Chandrikaben Panchal v. Chief Commissioner of Income Tax , (265 ITR 27) , which held that the conditions in the CBDT’s Circular are illustrative in nature and not exhaustive. The Gujarat High Court clarified that clauses (a) to (e) merely illustrate different facets of the underlying principle that waiver should be considered when delay is due to unavoidable circumstances or circumstances beyond the assessee's control. 11. Furthermore, the learned counsel for the petitioners contend that respondent No.1's reasoning for rejection, that returns were filed only after notice under Section 148 of the Act and consequent to survey under Section 133A of the Act is misconceived and contrary to established legal precedents. 11. Furthermore, the learned counsel for the petitioners contend that respondent No.1's reasoning for rejection, that returns were filed only after notice under Section 148 of the Act and consequent to survey under Section 133A of the Act is misconceived and contrary to established legal precedents. In advancing his case, the learned counsel for the petitioners relied on the Andhra Pradesh High Court's decision in Kakumanu Sudershan Rao v. Chief Commissioner of Income Tax , (234 ITR 444) , which held that mere filing of returns and payment of tax after issuance of notice under Section 148 of the Act does not detract from the CBDT order recommending waiver or reduction of interest. Additionally, the petitioners argue that the levy of interest under Section 234A is illegal and contrary to the provisions of the Income Tax Act. It was pointed out that except for the assessment year 1992-93, they filed returns for 1993-94 to 1994-95 in 1995 and for 1995-96 to 1997-98 on 19.09.1997 well before the reassessment in 2005. In support of his contention, the learned counsel for the petitioners relied on the Patna High Court's decision in Ranchi Club Ltd. v. CIT , (217 ITR 72) and the Supreme Court's decision in J.K. Synthetics Ltd. (94 STC 422) , which establish that interest under Section 234A is levied on tax declared in returns and not on income determined in reassessment orders and that the provision is meant to penalize default in filing returns not to burden assessees who have already filed returns and paid tax according to their understanding. Given that the petitioner No.2 is retired due to ill health and age, with only nominal rental income as evidenced by returns for 2007-08 and 2008-09, the petitioners request the Hon'ble Court to set aside the respondent No.1's order or direct reconsideration of the waiver application, particularly in view of the alleged wrong calculation of interest under Section 234A of the Act. 12. Per contra, the learned Senior Standing Counsel for Income Tax Department contended that the none of the conditions specified in the CBDT's order dated 26.6.2006 under Section 119(2)(a) were satisfied in the petitioner's case. 12. Per contra, the learned Senior Standing Counsel for Income Tax Department contended that the none of the conditions specified in the CBDT's order dated 26.6.2006 under Section 119(2)(a) were satisfied in the petitioner's case. The guidelines provided by the CBDT enumerate specific circumstances under which interest waiver may be granted, including delays due to seizure of books during search operations, income accruing after advance tax due dates that was not anticipated, income becoming taxable due to retrospective amendments or Supreme Court’s decisions and inability to file returns due to unavoidable circumstances followed by voluntary filing without detection by the Assessing Officer. 13. Further, the learned Senior Standing Counsel contended that the petitioner's case did not fall within any of these prescribed categories. Specifically, the filing of return for the assessment year 1992-93 was made only after the issuance of notice under Section 148 of the Act which was consequent to a survey conducted under section 133A of the Act on 25.03.1998. This indicated that the disclosure was not voluntary but was prompted by departmental action. Furthermore, the learned Senior Standing Counsel highlighted the substantial discrepancy between the income originally returned by the assessee and the income ultimately assessed across all the assessment years in question as evidenced by the comparative table presented in the order. 14. Furthermore, the learned Senior Standing Counsel submitted that if the survey operation under Section 133A of the Act was not conduct, the correct incomes would not have been brought to tax. The assessee's subsequent acceptance of the finally computed incomes, even though avoided protracted litigation, did not absolve or erase the initial failure to admit and return the correct incomes in the original returns filed. It was also contended that the assessee's cooperation in finalizing assessments and alleged lack of resources to pay interest were not sufficient grounds for waiver under the applicable legal framework and therefore the petition for waiver of interests was rejected. 15. Lastly, learned Senior Standing Counsel submitted that the financial hardship pleaded by the petitioner No.2 on account of retirement from profession due to ill health, age factor and having no source of income except nominal rental income, was not a valid ground for waiver of interest under the Income Tax Act. 15. Lastly, learned Senior Standing Counsel submitted that the financial hardship pleaded by the petitioner No.2 on account of retirement from profession due to ill health, age factor and having no source of income except nominal rental income, was not a valid ground for waiver of interest under the Income Tax Act. The levy of interest being statutory and mandatory in nature the same could not be waived merely on the ground of financial inability of the assessee to pay the same. 16. Therefore, for all the aforesaid submissions, the learned Senior Standing Counsel prayed that the writ petition filed by the petitioners be dismissed as the impugned order dated 29.03.2007 was passed in accordance with law and after due consideration of the facts and circumstances of the case. 17. Having heard the contentions put forth on either side and on perusal of records, the issue that arise for consideration before the Bench is “whether the petitioners are entitled to waiver of interest levied under Sections 234A, 234B, and 234C of the Act in circumstances where the returns were filed after issuance of notice under Section 148 of the Act following a survey under Section 133A of the Act, and where there existed substantial variation between the income originally returned and the income finally assessed?” 18. We are of the considered opinion that the petitioners did not meet any of the conditions set out in the CBDT’s Circular No.400/29/2002-IT, dated 26.06.2006, under Section 119(2)(a) of the Act. The said Circular enumerates specific circumstances under which the Chief Commissioner of Income Tax may exercise discretion to waive interest, including delays caused by seizure of books during search operations, income accruing after the due date for payment of advance tax which could not have been anticipated, income becoming taxable due to retrospective amendments or Supreme Court decisions, and inability to file returns due to unavoidable circumstances followed by voluntary filing before detection by the Assessing Officer. 19. The facts of the present case would reveal that the return for assessment year 1992-93 was filed on 28.01.2003 only after the issuance of notice under Section 148 of the Act, which itself came after a survey was conducted under Section 133A of the Act on 25.03.1998. This clearly shows that the disclosure was not made voluntarily but happened only because the Department took action. This clearly shows that the disclosure was not made voluntarily but happened only because the Department took action. The petitioners' reliance on the decision in Bhanubeen Panchal and Chandrikaben Panchal (supra) is misplaced, as the judgment merely held that the conditions in the Board Circular are illustrative and not exhaustive, but it does not obviate the requirement that the assessee must demonstrate that the delay or default was due to circumstances beyond their control or unavoidable circumstances. In the present case, no such circumstances have been demonstrated. 20. A significant factor that militates against the petitioners claim for waiver is the substantial discrepancy between the income originally returned by the petitioners and the income ultimately assessed by the Department across all the assessment years in question. The records reveal that there was considerable variation in the income figures, which indicate that the petitioners had not correctly assessed and disclosed their true income in the original returns filed. The total income which was initially assessed at Rs.25,09,159/- was subsequently reduced to Rs.16,10,987/- in the reassessment proceedings following the Income Tax Appellate Tribunal's directions. However, this reduction does not change the basic fact that the original returns filed by the petitioners did not show the true picture of their income. The petitioners' argument that they cooperated fully during the reassessment process and accepted the Annual Letting Value determined by the Assessing Officer to maintain peace with the Department does not constitute a valid ground for waiver of interest. The acceptance of reassessment orders without challenge, while avoiding protracted litigation, cannot erase or absolve the initial failure to admit and reflect the correct incomes in the original returns. The interest provisions under Sections 234A, 234B, and 234C of the Act are compensatory in nature and are designed to compensate the revenue for the loss of use of money during the period of default, and such interest being statutory and mandatory cannot be waived merely because the petitioners subsequently cooperated with the Department. 21. The petitioners did not voluntarily disclose their correct income. Instead, the disclosure happened only because the Department conducted a survey under Section 133A of the Act on 25.03.1998, and then sent notices under Section 148 of the Act. 21. The petitioners did not voluntarily disclose their correct income. Instead, the disclosure happened only because the Department conducted a survey under Section 133A of the Act on 25.03.1998, and then sent notices under Section 148 of the Act. The petitioners contention that no adverse material was found during the survey is contradicted by the subsequent course of events, wherein the Assessing Officer proceeded to complete assessments for the years 1992-93 to 1998-99 by adopting construction rates based on proper estimation, which resulted in substantial additions to the income originally returned. Even though these assessments were appealed and the Tribunal sent them back for reconsideration, this doesn't change the basic fact i.e. the correct income amounts would never have been taxed if the Department had not conducted survey and started the reassessment process. The reliance placed by the petitioners on the decision in Kakumanu Sudershan Rao (supra) is distinguishable on facts, as in that case the Andhra Pradesh High Court was dealing with a situation where the CBDT itself had recommended waiver or reduction of interest, whereas in the present case, the CBDT Circular prescribes conditions which have not been satisfied by the petitioners. Furthermore, the petitioners' argument regarding the illegal levy of interest under Section 234A of the Act based on the decision in Ranchi Club Ltd. (supra) fails to appreciate that while interest under Section 234A of the Act is indeed levied on tax declared in returns and not on income determined in reassessment orders, the provision is applicable when there is a delay in filing returns, and in the present case, the returns for various assessment years were filed belatedly, particularly for the assessment year 1992-93 which was filed only after issuance of notice under Section 148 of the Act. 22. Lastly, we are unable to accept the petitioners' plea that waiver should be granted on account of financial hardship, particularly the assertion by petitioner No.2 that he has retired from profession due to ill health and age factor and has no source of income except nominal rental income. While we are sympathetic to the personal circumstances of the petitioners, however, it is well- settled that financial inability to pay statutory interest is not a valid ground for waiver under the Income Tax Act. While we are sympathetic to the personal circumstances of the petitioners, however, it is well- settled that financial inability to pay statutory interest is not a valid ground for waiver under the Income Tax Act. The levy of interest under Sections 234A, 234B and 234C is statutory and mandatory in nature, flowing automatically from the provisions of the Act upon the occurrence of specified events such as delay in filing returns, non-payment of advance tax, or deferment of advance tax payments. The power conferred upon the Chief Commissioner under Section 119(2)(a) of the Act to grant waiver is not arbitrary but is circumscribed by the guidelines issued by the CBDT from time to time, and such power is to be exercised only in cases falling within the parameters of those guidelines. 23. The respondent No.1 has correctly appreciated the facts and circumstances of the case and has rightly concluded that the petitioners do not satisfy any of the conditions specified in the CBDT’s Circular for grant of waiver. The impugned order dated 29.03.2007 passed by the respondent No.1 rejecting the waiver petition is neither illegal nor arbitrary, but is a reasoned order passed after due consideration of the facts and in accordance with the applicable legal framework. 24. In view of the foregoing analysis, we find no merit in the present writ petition. The writ petition therefore deserves to be and is accordingly dismissed. 25. As a sequel, miscellaneous petitions pending if any, shall stand closed. However, there shall be no order as to costs.