No Relief to Actor Suriya: Madras High Court dismisses plea seeking Waiver of Interest on Income Tax for not fulfilling Conditions under Sec 220 (2A) [Read Order]

In a major setback to Actor R.S. Suriya, the Madras High Court dismissed his plea seeking waiver of interest on income tax as no Conditions were fulfilled under Section 220 (2A) of the Income Tax Act, 1961.

The petitioner, R.S. Suriya is a professional Cine Actor and regularly filed returns of income with the respondents. The petitioner follows the cash system of accounting as he received payments including advances by cash also. In the course of his profession, the petitioner received advances by cash with reference to priority in dates before finalization of the story or name or co-artists. Such advances will be treated as income and brought to books for accounting and taxation, only in the year, when the project materializes as it is common parlance in the industry that many projects would be dropped or delayed due to various reasons, including the call sheet problem. The petitioner is sometimes out of movies. While so, he has been facing harassment at the hands of the respondents for quite some time.

Mr.S.Raveekumar, the counsel for the petitioner contended that the representations submitted by the petitioner on several occasions are not considered and therefore, the impugned order is in violation of Section 220(2A) of the Income Tax Act. The petitioner furnished all the materials and relevant documents to establish that he is not responsible for the delay and he had cooperated with the completion of the assessment proceedings. This apart, the petitioner paid the tax as demanded in time by submitting the returns of income punctually, and therefore, he is entitled to waiver of interest as contemplated under Section 220(2A) of the Act.

Suriya's counsel contended that the mere possession of assets by the assessee cannot be a disqualification to consider the ground of genuine difficulty.

The Court observed that in order to avail a waiver of interest under Section 220(2A), the Chief Commissioner or Commissioner of Income Tax has to be satisfied that the payment of the amount demanded would cause genuine hardship to the assessee; that the default in payment of the amount was due to circumstances beyond the assessee's control, and; the assessee has cooperated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him.

The single-judge bench of Justice S.M. Subramaniam held that the actor was not eligible for a waiver of interest since he had not complied with all three conditions to be fulfilled for claiming such a waiver under Section 220 (2A) of the Income Tax Act of 1961. The judge concurred with the Principal Commissioner that the petitioner had neither cooperated in completing the assessment proceedings nor paid the taxes on time.

"The genuine difficulty as defined is the subjective satisfaction of the authority competent, which is to be established by the assessee ... The findings are made based on the records available and the said findings would reveal that the petitioner assessee had not paid the demands for both the assessment years. The details of nonpayments were also furnished in the impugned order... the conduct of the assessee throughout the income tax proceedings is vital for the purpose of claiming waiver of interest. The respondents in the present case recorded the non-cooperation of the petitioner assessee", the Court said.

To Read the full text of the Order CLICK HERE

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