2006 (7) TMI 136 - HC - Income Tax

Application under section 273A - subsequent events - Application under section 273A came to be rejected on ground that disclosure could not be said to be full and true.- She could not prove that the jewellery seized belongs to various people as claimed by her the factual matrix demonstrates that the petitioner during pendency of this petition could prove that the findings on the basis of which the petitioner was denied relief of section 273A of the Act, do not survive as on date - we feel that it would be necessary to direct the Commissioner of Income-tax to reconsider the application filed and the submissions made by the petitioner on its own merits in the light of the subsequent events since they have dislodged the validity of the adverse findings suffered by the petitioner. - application under section 273A of the Act is restored to the file of the Commissioner of Income-tax,. The proceedings are remitted back to him for consideration afresh following the principles of natural justice.

Summary

Issues Involved:
Challenge to order under section 273A of the Income-tax Act, 1961; Denial of relief based on failure to prove ownership of seized jewellery; Impact of subsequent events on the validity of the impugned order.

Analysis:
The judgment concerns a petition challenging an order under section 273A of the Income-tax Act, 1961, passed by the Commissioner of Income-tax, City VII, Mumbai. The Commissioner rejected the application under section 273A citing reasons related to the failure of the petitioner to prove ownership of seized jewellery and the initiation of penalty proceedings under section 271(1)(c) of the Act. The court noted that subsequent events had a significant impact on the case, specifically the petitioner proving ownership of jewellery belonging to various individuals during the intervening period. This evidence contradicted the basis on which relief was denied earlier.

The petitioner's counsel argued that the subsequent events rendered the impugned order invalid, citing a judgment to support the claim that developments occurring during the pendency of a case can overshadow the original findings. The court agreed with this argument, emphasizing that the subsequent events had completely altered the original findings of the case. As a result, the court set aside the impugned order dated October 15, 1992, and directed the Commissioner of Income-tax to reconsider the application under section 273A in light of the new evidence, ensuring a fair evaluation of all submissions.

In conclusion, the court allowed the petition, remitting the proceedings back to the Commissioner for a fresh consideration within a specified timeframe. The judgment highlights the importance of considering subsequent events that impact the validity of earlier decisions and underscores the need for a thorough review based on principles of natural justice.