2011 (2) TMI 874 - HC - Income Tax

Waiver of interest and penalty - Relief - In the present case, although applications had been filed on different dates or separately, still the relief sought for by the petitioner was considered together by a common order and the bar under sub-section (3) is only attracted only after the order is made and not prior to that - When that is so, it was not open to the Commissioner to have refused to consider the application filed by the petitioner for the assessment year 1986-87 - Decided in the favour of the assessee by way of remand

Summary

Issues:
1. Interpretation of Section 273A of the Income Tax Act, 1961 for waiver of interest and penalty.
2. Entitlement of an assessee to claim benefit of waiver under Section 273A for multiple assessment years.
3. Consideration of applications for relief under Section 273A by the Commissioner for different assessment years.

Detailed Analysis:
Issue 1: The petitioner sought a writ of mandamus directing the respondent to consider his application under Section 273A of the Income Tax Act, 1961 for waiver of interest and penalty relating to the assessment year 1987-88. The respondent contended that the assessee could only avail relief under Section 273A once, and since the returns were filed on different dates, it did not constitute one disclosure. The High Court examined Section 273A(3) which states that an assessee can receive relief only once, regardless of the number of assessment years involved. The court referred to a Karnataka High Court decision and held that the respondent was incorrect in denying the petitioner's application for the assessment year 1987-88.

Issue 2: The key question was whether an assessee could claim the benefit of waiver under Section 273A for multiple assessment years with a common order by the Commissioner. The court analyzed the provision of Section 273A(3) and cited the Karnataka High Court case where it was observed that once relief is granted for one or more assessment years, the assessee cannot seek further relief. The court emphasized that the Commissioner should not refuse to consider an application for waiver of interest and penalty for a specific assessment year if the conditions for relief are met.

Issue 3: The court concluded that the Commissioner was not justified in rejecting the petitioner's request to entertain his application for waiver of interest and penalty for the assessment year 1987-88. The court allowed the writ petition and remitted the matter to the Commissioner to reconsider and decide on the petitioner's application in accordance with the law. The judgment clarified that the Commissioner should not deny relief if the conditions for waiver under Section 273A are fulfilled, even if the applications were filed on different dates.

In summary, the High Court's judgment focused on the correct interpretation of Section 273A of the Income Tax Act, 1961 regarding the waiver of interest and penalty for assessment years. It emphasized that an assessee can seek relief under Section 273A only once, but if the conditions are met, the Commissioner should consider applications for multiple assessment years and grant relief accordingly.