Hon'ble Bharati Sapru, J.
(Delivered by Hon'ble Rajes Kumar, J.) In the present writ petition, the petitioner seeks the following reliefs:
"(a) a suitable writ, order or direction in the nature of certiorari quashing the order dated 18.2.2009 passed by the Chief Commissioner of Income-Tax, Allahabad, the respondent no. 1, in respect of application of the petitioner dated 8.4.2008 for waiver of interest under Section 234B and 234C of the Income-Tax Act, 1961, (Annexure-1);
(b) a suitable writ, order or direction in the nature of mandamus directing the Chief Commissioner of Income-Tax, Allahabad, the respondent no. 1, to consider the application of the petitioner in accordance with notification of the Central Board of Direct Taxes No. 400/234/95-IT (B) dated 23.5.1996 and not in accordance with the notification no. 400/129/2002-IT (B) dated 26.6.2006;
(c) a suitable writ, order or direction in the nature of mandamus directing the Income-Tax Officer, Bhadohi, the respondent no. 2, to treat the amount of Rs.3,83,304/- retained under Section 132(5) of the Act as a tax paid otherwise under sub-section (2) and to exclude it in the working of interest under sub-section (1) of Section 234B of the Act;
(d) a suitable writ, order or direction in the nature of mandamus directing the Income-Tax Officer, Bhadohi, the respondent no. 2, to grant interest u/s 132B (4) for a period of 26 months (22.5.1991 to 16.7.1993) and thereafter under Section 244A of the Act on the excess amount of Rs.1,43,132/- after taking into tax liabilities of the petitioner and its partners;
(e) a suitable writ, order or direction which this Hon'ble Court may deem fit and appropriate in the circumstances of the case; and
(f) award costs in favour of the petitioner."
Heard Sri R.B. Shukla, learned counsel for the petitioner and Sri Dhananjay Awasthi, learned Standing Counsel.
During course of hearing, learned counsel for the petitioner stated that he was pressing only relief nos. (a) & (b) and not pressing relief nos. (c) & (d).
The brief facts of the case are that the petitioner was engaged in the business of job work in carpet dying. A search was conducted under Section 132(1) of the Income Tax Act (hereinafter referred to as the "Act") in the business premises of M/s Central Coal Fields Ltd. (CCL), Ranchi on 30.7.1990. During course of search, a demand drafts amounting to Rs.3,83,304/- alleged to be prepared by the petitioner were seized from the said premises. An assessment order was passed under Section 143(3) of the Act by the Income-Tax Officer, Bhadohi on 16.7.1993 on a total income of Rs.6,61,350/- against the return income of Rs.80,740/-. A sum of Rs.3,83,304/- was treated as an income as an unexplained investment.
Being aggrieved by the assessment order, the petitioner filed appeal before the Commissioner of Income-Tax (Appeal), who has confirmed the addition made by the Assessing Authority. It appears that second appeal filed by the petitioner has been allowed in part. Giving effect to the appellate order, the Assessing Officer revised the assessment order on 14.12.2005 on a total income of Rs.5,09,188/-. After the revision of the income assessed, the Assessing Authority charged the interest under Section 234B & 234C of the Act at Rs.46,317/- and Rs.939/- respectively.
The petitioner moved a petition dated 8.4.2008 before the Chief Commissioner of Income-Tax seeking waiver of interest under Section 234B & 234C of the Act amounting to Rs.46,317/- and Rs.939/- respectively charged by the Income Tax Officer, Bhadohi for the assessment year 1991-92. The Chief Commissioner of Income-Tax by its order dated 18.2.2009 rejected the application. Being aggrieved by the order, the present writ petition is being filed.
The Chief Commissioner of Income-Tax has rejected the application mainly on the ground that notification no.400/234/95-IT (B) dated 23.5.1996 issued in exercise of power under Section 119 of the Act has been superseded by notification F.No.400/129/2002-IT(B) dated 26.6.2006 by which clause (b) of paragraph -2 of the earlier notification has been deleted and under the new notification, the petitioner does not fulfil any of the four conditions required for the consideration of the application. The Chief Commissioner of Income-Tax was of the view that the application was received in the office on 8.4.2008, when the earlier notification dated 23.5.1996 has been superseded by notification dated 26.6.2006 and the petitioner's claim can only be examined under notification dated 26.6.2006 and not under notification dated 23.5.1996.
Learned counsel for the petitioner submitted that the assessment order involved is of 1991-92. The assessment order was passed on 22.11.1990 and the interest under Section 234B & 234C of the Act was charged vide order dated 14.12.2005. The right of the petitioner to seek the waiver of interest accrued much prior to the notification dated 26.6.2006 and, therefore, the claim of waiver should be examined with reference to the notification no.400/234/95-IT (B) dated 23.5.1996 and not under the notification F.No.400/129/2002-IT(B) dated 26.6.2006 and if the case of the petitioner is being examined under the aforesaid notification dated 23.5.1996 the case of the petitioner would be covered under clause (b) which has been subsequently deleted by notification dated 26.6.2006. In support of its claim, learned counsel for the petitioner has relied upon the Full Bench decision of the Allahabad High Court in the case of Ashwani Dhingra v. Chief Commissioner of Income-Tax and others, reported in 275 ITR-72. He further submitted that the apex Court in the case of Suchitra Components Ltd. v. Commissioner of Central Excise, Guntur, reported in (2006) 12 SCC-452 has held that a beneficial circular has to be applied retrospectively while oppressive circular has to be applied prospectively. He further relied upon the decision of the Bombay High Court in the case of BASF (India) Ltd. and another v. W. Hasan, Commissioner of Income-Tax and others, reported in (2006) 280 ITR 136 (Bom) wherein it has been held that circulars which are in force during the relevant assessment years are the circulars that have to be applied and subsequent circulars either withdrawing or modifying the earlier circulars have no application.
Sri Dhananjay Awasthi, learned Standing Counsel submitted that the petitioner has filed the application dated 8.4.2008 when the earlier circular/notification dated 23.5.1996 has already been superseded by notification/circular dated 26.6.2006 and, therefore, after the supersession, the claim of the petitioner could only be examined under the circular/notification dated 26.6.2006 and not under the circular/notification dated 23.5.1996. He submitted that on the date of the issue of new circular/notification dated 26.6.2006 no application for the waiver under circular/notification dated 23.5.1996 was pending. The petitioner, for the first time, filed the application seeking waiver in the year 2008 when circular/notification dated 26.6.2006 for the grant of waiver was only available and since the petitioner failed to fulfil the conditions under the notification dated 26.6.2006, therefore, the application of the petitioner has rightly been rejected. The claim of the petitioner that its application should be considered under the notification dated 23.5.1996 has no substance and is liable to be rejected.
We have heard learned counsel for the parties and perused the impugned order.
The facts are not in dispute. Admittedly, the petitioner has moved an application on 8.4.2008. The petitioner has not fulfilled the conditions of the circular/notification F.No.400/129/2002-IT(B) dated 26.6.2006. The only issue for consideration is whether the petitioner's claim for waiver of interest relating to assessment year 1991-92 arising from the assessment order dated 22.11.1990 and the revised order dated 14.12.2005 are to be considered under the circular/notification no.400/234/95-IT (B) dated 23.5.1996 which has been superseded by circular/notification F.No.400/129/2002-IT(B) dated 26.6.2006. Both the aforesaid notifications, namely, dated 23.5.1996 and 26.6.2006, have been issued by the Central Board of Direct Taxes under Section 119 (2) of the Act granting waiver of interest under Section 234B, 234B & 234C of the Act. It would be relevant to refer paragraph-4 of the notification dated 26.6.2006 which reads as follows:
"Earlier orders under Section 119(2)(a) dated 23.5.1996 and 30.1.1997 on the subject stand superseded by this Order. If any petition in the past has been rejected because the Board had not issued this direction earlier, such petition may be reconsidered and decided in accordance with this Order. If any petition in the past was allowed in accordance with the Orders under Section 119(2)(a) dated 23.5.1996 and 30.1.1997, such orders allowing waiver should not be reopened/revised as per the guidelines contained in this Order."
It may be mentioned here that by circular dated 23.5.1996 and 26.6.2006 issued by the Central Board of Direct Taxes under Section 119(2)(b) of the Act, the Commissioner of Income-Tax has been given power to grant waiver from the realization of interest. Thus, the power to grant the waiver is derived under the aforesaid notifications. The question is when the Commissioner should exercises the power to grant the waiver under circular dated 23.5.1996 which was not available and superseded by circular dated 26.6.2006.
Let us examine the cases relied upon by the learned counsel for the petitioner.
In the case of Ashwani Dhingra v. Chief Commissioner of Income-Tax and others (Supra), the dispute was whether on the facts and circumstances the Chief Commissioner of Income-Tax was justified in rejecting the waiver application. In the said case there was no dispute as involved in the present case. Therefore, this decision is clearly distinguishable and is not applicable to the present case.
In the case of Suchitra Components Ltd. v. Commissioner of Central Excise, Guntur (Supra), the apex Court has referred its earlier decision in the case of CCE v. Mysore Electricals Industries Ltd., reported in (2006) 12 SCC 448. It has been observed that a beneficial circular has to be applied retrospectively while oppressive circular has to be applied prospectively. Thus, when the circular is against the assessee, they have right to claim enforcement of the same prospectively. On a perusal of the judgment in the case of CCE v. Mysore Electricals Industries Ltd. (Supra) it appears that the aforesaid observation was the argument of learned counsel for the assessee and not the view expressed by the Court. In any view of the matter, the aforesaid observation has no relevance to the dispute involved in the present case.
Both the circular/notifications no.400/234/95-IT (B) dated 23.5.1996 F.No.400/129/2002-IT(B) dated 26.6.2006 have been issued by the Board under Section 119 of the Act granting power to the Commissioner of Income-Tax to waive the interest. No substantive right was vested with the petitioner to claim the waiver. Since the circular/notification dated 23.5.1996 has been superseded by circular/notification dated 26.6.2006 its ceases to exist on the date of its supersession. Thus, the claim of waiver could only be examined under the circular which was in existence on the date of application and not under the superseded circular. Therefore, the respondent has rightly held that the claim of waiver cannot be examined under the circular/notification dated 23.5.1996.
The word "supersession" came up for consideration before the apex Court in the case of State of Orissa and others v. Titaghur Paper Mills Company Limited and another, reported in AIR 1985 SC-1293. In the said case, one of the notifications under the Sales Tax has been superseded by the subsequent notification. On this situation the word "supersession" has been examined by the apex Court. The apex Court held that the expression 'in supersession of all previous notifications' amounts to repeal and replace the previous notifications by new notifications. The apex Court has observed as follows:
"...........In the Notifications dated Dec. 29, 1977, the word "supersession" is used in the same sense as the word "repeal" or rather the words "repeal and replacement". The Shorter Oxford English Dictionary, Third Edition, at page 2084, defines the word 'supersession' as meaning "The action of superseding or condition of being superseded". Some of the meanings given to the word 'supersede' on the same page in that Dictionary which are relevant for our purpose are "to put a stop to; to render superfluous or unnecessary; to make of no effect; to annul; to take the place of (something set aside or abandoned); to succeed to the place occupied by; to supply the place of thing". Webster's Third New International Dictionary at page 2296 defines the word "supersession" as "the state of being superseded : removal and replacement". Thus, by using in the Notifications dated Dec. 29, 1977, the expression 'in supersession of all previous notifications' all that was done was to repeal and replace the previous notifications by new notifications................."
In the case of Calcutta Municipal Corporation versus Pawan Kumar Saraf and another, reported in (1999) 2 SCC-400, the apex Court observed that when Section 13(3) says that the certificate of Director, CEL shall supersede the report, it means that the report would stand annulled or obliterated. The word "supersede" in law means "obliterate, set aside, annul, replace, make void or inefficacious or useless, repeal".
In view of the foregoing discussion, we do not find any error in the order of the Chief Commissioner of Income-Tax, Allahabad.
In the result, the writ petition fails and is dismissed.
Dated: 24th September, 2010 OP