2001 (11) TMI 45 - HC - Income Tax

Summary

Issues:
Challenge to refusal to waive penalty under section 271(1)(c)(iii) of the Income-tax Act, 1961 for assessment years 1984-85 and 1987-88 to 1990-91.

Analysis:
The petitioner, a legal heir, discovered undisclosed investments and income of the deceased assessee. The petitioner voluntarily filed returns for the undisclosed amounts and requested the Income-tax officer to reopen assessments under section 147/148 for the relevant years. Subsequently, the petitioner applied for waiver of penalty under section 271(1)(c)(iii) for the assessment years in question. The Commissioner of Income-tax disposed of the application on February 20, 1996, and rejected a subsequent rectification request on July 30, 1996.

The petitioner argued that under section 273A, the Commissioner did not require approval to deal with the matter. The petitioner contended that the conditions for waiver of penalty were met, citing relevant case law. The Commissioner's referral of the matter to the Chief Commissioner was seen as a positive step towards waiver. The petitioner sought judicial intervention to set aside the order and direct the authority to act in accordance with the law.

In response, the respondents argued that the orders were speaking orders, and the petitioner's application for rectification under section 154 was disposed of reasonably. The respondents contended that the writ application was not maintainable as the order was appealable under section 246(1)(ii) of the Income-tax Act. They emphasized that the order under section 273A had merged with the order under section 154, making it appealable. The respondents maintained that the order was valid and did not warrant interference.

The court, after considering the arguments, found that the petitioner had the right to appeal the order through the appropriate forum. As the order was appealable and no jurisdictional issues were raised, the court concluded that the petitioner's remedy lay in filing an appeal, not in a writ application. Consequently, the court dismissed the application, stating that the petitioner should pursue the appeal route instead of seeking relief through writ proceedings.