Assessing Officer to Collect More Tax, cannot take Advantage of Assessee’s Ignorance: HC

The Karnataka High Court in the matter of Shri Devendra Pai Vs. Assistant Commissioner of Income Tax Condones Delay Of 6 Years In Filing Revised ITR by saying that AO can’t take advantage of assessee’s ignorance to collect tax.

The petitioner is a retired ICICI Bank employee and had availed of the Reserve Bank’s Optional Early Retirement Scheme and was paid superannuation benefit of Rs.500000/-. The Certificate reflecting benefit made out to the petitioner as per the scheme is enclosed at Annexure-A.

The petitioner submitted that return of income for the assessment year 2004-2005 was filed and in the return filed, petitioner did not claim the benefit of exemption as was available under Section 10(10C) of the Income Tax Act, 1961. The respondent issued intimation under Section 143(1) of the Act accepting the return filed by the petitioner.

The Coram found that “Unfortunately, the assessee’s application under Section 119(2)(b) has been rejected on the ground that the same was filed beyond the period of 6 years, while observing that the circular 9/2015 dated 09.06.2015 does not permit condoning the delay beyond 6 years.”

It is also observed that the intention of circular no.14 (XL-35) dated 11.04.1955 was not that the tax should not be charged or that any favour should be shown to anybody in the matter of assessment, or where investigations are called for, they should not be made. Whatever the legitimate tax it must be assessed and must be collected. The purpose of the circular is merely to emphasise that the tax officer should not take advantage of an assessee’s ignorance to collect more tax out of him than is legitimately due from him.

The High Court Ruled out that, “the impunged order at Annexure-G dated 17.02.2017 is set aside, the delay is condoned and the application under section 119(2) of the Act is allowed. It is however clarified that as regards to the grant of refund, eventually the light of the delay, there would be exclusion of interest on the amount of refund. It is also clarified that the order is passed taking note of the peculiar facts and circumstances of the case and accordingly, may not be considered to have laid down the law as regards the aspect of condonation of delay under section 119(2) of the Act or on other issues dealt with herein.”

The Judgment was made by Hon’ble Justice Mr. S. Sunil Dutt Yadav.

The petitioner is represented by Shri S. Shankar and the respondent is represented by Shri. E.I. Sanmathi.

To Read the Order Download PDF Given Below: