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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
MR. JUSTICE AVNEESH JHINGAN, MRS. JUSTICE SHUBHA MEHTA, JJ
Dr. V. K. Jain, Prop. Shri K.m.m. Jain Heart & General Hospital - Appellant
Versus
Union Of India - Respondent
D.B. Civil Writ Petition No. 18870/2013
Decided On : 31-01-2025
(A) Income Tax Act, 1961 - Sections 132-B(4) and 153-D - Petition filed seeking interest on delayed refund and quashing of order by Commissioner of Income Tax - The claim for interest was rejected on grounds that orders by Settlement Commission are not covered by Section 132-B(4) - The cases of petitioners were found not similar due to differing circumstances. (Paras 1, 2, 7)
(B) Withdrawal of Petition - Liberty granted to withdraw petition of petitioner No.1 with permission to file afresh - The court found that the CIT did not consider the unique facts of the case of petitioner No.2. (Paras 3, 4, 8)
Facts of the case:
The petitioners challenged the CIT's order regarding the interest on delayed refund, asserting that the assessment of petitioner No.2 was made under Section 153-A, contrary to the CIT's findings. (Paras 1-4)
Findings of Court:
The court set aside the order regarding petitioner No.2 and remitted the matter back to the CIT for a fresh decision, emphasizing the need for consideration of the specific facts. (Paras 8, 9)
Issues: The primary issue was whether the CIT adequately considered the differing circumstances of the two petitioners in relation to their claims for interest. (Para 7)
Ratio Decidendi: The court ruled that the CIT's reasoning for rejecting the claim of interest for petitioner No.1 did not apply to petitioner No.2, necessitating a fresh evaluation. (Para 8)
Result: Writ petition allowed.
Order :
AVNEESH JHINGAN, J.
1. This petition is filed seeking the interest under Section 132- B(4) of Income Tax Act, 1961 and the quashing of the order dated 13.12.2012 passed by Commissioner of Income Tax (Central), Jaipur (for short, “CIT”).
2. The brief facts are that the search was conducted on the hospital and premises of the petitioners and apart from other things cash was seized. The proceedings initiated in pursuance to search culminated in the order by settlement commission in case of petitioner No.1. The assessment under Section 143(3), after getting approval from the Joint Commissioner, Income Tax under Section 153-D was framed in case of petitioner No.2. The claim of the petitioner for interest on delayed refund was rejected on the grounds that the orders passed by the Settlement Commission shall be not covered by the provisions of Section 132-B(4).
3. Learned counsel for the petitioners at this stage seeks permission to withdraw the present petition qua petitioner No.1 with liberty to file fresh with better particulars. Viz-a-viz petitioner No.2 the contention is that the assessment order of the petitioner No.2 was under Section 153-A as the order was passed after seeking approval from the Joint Commissioner under Section 153-D.
4. The grievance raised is that the CIT has not considered the case of the petitioner No.2 on its own facts.
5. Learned counsel for the respondents defends the impugned order and submits that common representation was given for both the petitioners and was considered accordingly.
6. The liberty sought qua petitioner No.1 to withdraw the petition is allowed as prayed for.
7. After hearing learned counsel for the parties and perusing the pleadings, it is forthcoming that the case of petitioner Nos.1 & 2 is not similar. The case of petitioner No.1 was settled by Settlement Commission, whereas an assessment order was passed in the case of petitioner No.2. The CIT has not considered that the claim for interest in both the cases is on different footings. The reasons recorded for rejecting the claim of interest qua petitioner No.1 would not apply to the case of petitioner No.2.
8. The impugned order qua petitioner No.2 is set-aside and matter is remitted back to CIT to decide the claim of petitioner No.2 afresh in accordance with law, after providing an opportunity of hearing.
9. The writ petition is allowed.
The court emphasized that differing circumstances in tax cases must be individually assessed, particularly regarding claims for interest on delayed refunds.
The main legal point established in the judgment is that the petitioner is entitled to interest as calculated by the petitioner and confirmed by the respondent, and is also entitled to interest durin....
Tax authorities must adhere to statutory time limits when passing orders; failure results in entitlement to refunds and interest for taxpayers.
Taxation - Liability to pay additional interest - Interest u/s 244A(1A) would not accrue in cases of fresh assessment or reassessment; use of words ‘wholly or partly’ therein would again indicate tha....
The court emphasized the necessity for a reasoned order addressing all material contentions raised by the petitioner, particularly regarding the impact of the COVID-19 pandemic on estimating income f....
The court affirmed the obligation of tax authorities to comply with statutory provisions for interest payments on seized amounts, directing timely action to address delays in such refunds.
Interest on tax is payable from the date of the first assessment order if not paid within the specified time.
The court enforced the provision for interest payment in accordance with section 132B(4) of the Income Tax Act, 1961, by directing the Respondent to take action on the representation for interest pay....
A party's financial hardship does not justify a waiver of statutory interest under the Income Tax Act, which demands adherence to specific CBDT criteria for such waivers.
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