Case: New Punjab Skin Company Vs. Union of India and Others

Delay in filing rejoinder affidavit is condoned and the same is taken on record. Heard Shri Arun Monga, learned counsel for the petitioner, and Shri Harish N. Salve, learned Solicitor General for the respondents. In this special leave petition the assessee has assailed the order dated August 19, 1999 (see of the Punjab and Haryana High Court confirming the order dated May 11, 1999, passed by the Director General of Income-tax (Investigation) Delhi and NW Region, respondent No. 2 herein. The short question that arises for determination in the case is whether respondent No. 2 has power to waive the interest levied under section 158BFA(1) of the Income-tax Act. Section 158BFA(1) provides, inter alia, that where the return of total income including undisclosed income for the block period, in respect of search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A on or after January 1, 1997, as required by a notice under clause (a) of section 158BC , is furnished after the expiry of the period specified in such notice, or is not furnished, the assessee shall be liable to pay simple interest at the rate of two per cent of the tax on undisclosed income, determined under clause (c) of section 158BC. In this case undisputedly there was delay of four months 28 days in filing the return by the assessee. The assessee took the plea that the delay was caused in getting copies of the relevant documents which had been seized by the department in the course of search and seizure proceedings. The assessee placed reliance on the provision in section 234A of the Income-tax Act and the circular of the Central Board of Direct Taxes dated May 23, 1996 (see 1997 (225) ITR(St) 101), wherein certain guidelines for waiver of interest leviable under section 234A of the Act under certain circumstances had been issued.Respondent No. 2 in the order dated May 11, 1999, declined to accept the prayer of the assessee for waiving the interest levied under section 158BFA either under the provisions of the Income-tax Act or under the circular issued by the Central Board of Direct Taxes. He also referred to a clarification received from the Board that power of waiver of interest under section 158BFA is not vested in him. As noted earlier the High Court confirmed the order passed by respondent No. 2 on the merits. It is pertinent to mention here that the circular dated May 23, 1996 (see 1997 (225) ITR(St) 101), was issued by the Board under section 119(2)(a) of the Income-tax Act which vests power in the Board to pass general or special order for waiver of interest under the provisions specified therein including sections 234A, 234B and 234C of the Income-tax Act. No such power is vested in the Board so far as the interest leviable under section 158BFA(1) is concerned. We have perused the papers and considered the submissions of learned counsel appearing for the parties. The order passed by the High Court dismissing the writ petition confirming the order passed by the Director General of Income-tax (Investigation), Delhi and NW Region, does not suffer from any serious illegality which warrants interference by this court in exercise of jurisdiction under article 136 of the Constitution.

Decision:
0[ds]The order passed by the High Court dismissing the writ petition confirming the order passed by the Director General ofx (Investigation), Delhi and NW Region, does not suffer from any serious illegality which warrants interference by this court in exercise of jurisdiction under article 136 of the Constitution.