9911796707
TMI Blog1997 (4) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... aiver of interest and penalties for the assessment years 1972-73 to 1979-80 to the first respondent. In that petition, the appellant has prayed that he may be granted all the reliefs and benefits available to him under the provisions of section 273A of the Act, and, in particular, the interest of Rs. 10,855 charged under section 139(8) of the Act and Rs. 13,661 charged under section 217(IA) of the Act may be waived, and the various penal proceedings initiated under section 274 of the Act read with sections 271 and 273 of the Act may also be dropped. It is, therefore, seen that the appellant has submitted his petition dated May 4, 1981, under section 273A of the Act for the waiver of various interests charged in the assessment and the penal proceedings initiated under the various provisions of the Act, viz., for failure to file the return within the time allowed under the Act, failure to furnish estimates of advance tax and concealment of income. The first respondent by his order dated November 23, 1981, has observed that the Income-tax Officer examined the case and framed the assessment orders, however, recomputing the professional income in consequence of disbeliving certain cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 273A of the Act even at that stage. In Jakhodia Brothers v. CIT [1978] 115 ITR 61 (All), it has been held that section 273A of the Act can be invoked before or after penalty is imposed. In India and Co. v. CIT [1980] 122 ITR 510 (Raj), it had been held that an application under section 273 of the Act can be made during the pendency of an appeal against the order of penalty or even after its disposal. I, therefore hold that the reduction or waiver of penalty or interest arises not only in cases where the penalty is imposed or the interest is levied or paid but is also applicable in cases where the same is imposable or payable as the application under this section is independent of other provisions of the Act." In the result, the learned single judge dismissed the writ petition. Aggrieved by the said order, the present writ appeal has been filed. We have heard Mr. K. S. Balakrishnan, for the appellant, and Mr. S. V. Subramaniam, learned senior standing counsel for the respondents. Mr. K. S. Balakrishan, learned counsel for the appellant, contended that the learned single judge has not noticed that the order of the first respondent was challenged not only on the grounds of ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e may be allowed all the reliefs and benefits available to him under the provisions of the Act and in particular, the interest of Rs. 10,855 charged under section 139(8) of the Act and Rs. 13,661 charged under section 217(1A) of the Act. He also prayed for the waiver of those amounts and dropping of the various penal proceedings initiated under section 274 of the Act read with sections 271 and 273 of the Act. A mere reading of the petition itself discloses that the appellant has not complied with the provisions of the Act and, therefore, he would not be entitled to full waiver of interest charged and also the dropping of the various penal proceedings initiated against him. Section 273A of the Act reads thus : "273A. (1) Notwithstanding anything contained in this Act, the Commissioner may, in his discretion, whether on his own motion or otherwise, (i) reduce or waive the amount of penalty imposed or imposable on a person under clause (i) of sub-section (1) of section 271 for failure, without reasonable cause, to furnish the return of total income which he was required to furnish under sub-section (1) of section 139 ; or (ii) reduce or waive the amount of penalty imposed or imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b) if in a case falling under clause (c) of sub-section (1) of section 271, the amount of income in respect of which the penalty is imposed or imposable for the relevant assessment year, or, where such disclosure relates to more than one assessment year, the aggregate amount of such income for those years, exceeds a sum of five hundred thousand rupees, no order reducing or waiving the penalty under sub-section (1) shall be made by the Commissioner except with the previous approval of the Chief Commissioner or Director-General, as the case may be. (3) Where an order has been made under sub-section (1) in favour of any person, whether such order relates to one or more assessment years, he shall not be entitled to any relief under this section in relation to any other assessment year at any time after the making of such order........ " A reading of the above section will show that the Commissioner can invoke the provisions of section 273A of the Act where the penalty is imposed or imposable and, therefore, the contention of learned counsel for the appellant, that the first respondent can invoke the provisions of section 273A of the Act only where penalty was already levied, cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvance of the provisions of the Act. Therefore, this judgment has no application to the case on hand. The decision reported in Mohammed Ali v. CWT [1983] 141 ITR 690 (Gauhati), is by a Division Bench of the Gauhati High Court. In that case, the Commissioner of Wealth-tax has found that the assessee has submitted the returns voluntarily and made disclosure in good faith, of his net wealth without any notice under section 14(2) of the Wealth-tax Act and had extended all co-operation in completing the assessment. The Commissioner had reduced the penalty only up to 25 per cent. of the minimum imposable under the Act. The Division Bench held that the Commissioner was fully satisfied that all the conditions precedent for the exercise of the power under section 18(2A) of the Wealth-tax Act were fulfilled but the Commissioner had not given reasons for not waiving the penalty in full. Therefore, the Division Bench set aside the order of the Commissioner and the Commissioner was directed to decide the matter afresh in the light of the observations contained in the judgment. As already noticed, as a matter of fact, in the instant case, the appellant has not filed the returns in time and pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant himself has moved the first respondent even before the penalties were actually levied, which will only disclose that he was aware that the first respondent can exercise his power under section 273A of the Act even it that stage. As observed by the Division Bench, the question of reduction would arise only when the penalty has been imposed. Further, the appellant has not fully disclosed his income and satisfied the other conditions imposed by the said section. Therefore, his subsequent act of voluntary disclosure would not affect the imposition of penalty for concealment. But, in the instant case, the first respondent has taken a lenient view of the matter and has reduced the penalty on the appellant. In any view of the matter, the order of the first respondent reducing the penalty cannot at all be construed as an exercise beyond the jurisdiction of section 275A of the Act. Arguing contra, learned senior standing counsel appearing for the Department drew our attention to a very recent judgment of the Supreme Court reported in Harbans Kaur (Smt.) v. CWT [1997] 224 ITR 418. In that case, penalty was imposed under section 18 of the Wealth-tax Act on the assessees, who are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer of the rank of the Commissioner to be reposed with the discretionary power to choose between entire waiver or reduction in any proportion. Of course, when the Commissioner, instead of giving a complete waiver, chooses to give only a reduction for the penalty amount he must indicate in his order that he has applied his mind in that regard. In this view, there is no warrant, for the proposition that the Commissioner, if satisfied of the compliance of conditions, has only one choice, i.e., to waive the penalty in entirety. Otherwise, it may mean that the Commissioner can in a case where conditions are not satisfied, reduce the penalty amount. When conditions are not satisfied, the Commissioner cannot do either. Only when the said conditions are satisfied that the occasion arises for the Commissioner to exercise his discretion-not before." The Supreme Court has also rejected the proposition of counsel for the assessee, as done by the appellant in the present case, that the Commissioner, if satisfied with the compliance of conditions has only one choice, i.e., to waive the penalty in entirety and only when the conditions are satisfied that the occasion arises for the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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