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TMI Blog1995 (3) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... to disclose the same which he did in a disclosure statement filed on October 12, 1988, before the Commissioner of Income-tax, in which he made a request for waiver of penalties leviable in exercise of the powers under section 273A of the Income-tax Act. The request made by the petitioner remained pending for over four years, and was finally rejected by the Commissioner in terms of his order impugned in this petition. The Commissioner held that the revised return filed by the petitioner on October 24, 1988, was involuntary and had been motivated by a search. He further held that the condition regarding full and true disclosure of income by the assessee was not satisfied so as to justify waiver of the penalty under section 273A(1). Aggrieved, the petitioner has filed the present writ petition for a writ of certiorari as already pointed out earlier. Mr. Hanumantha Rao, learned counsel appearing for the petitioner, argued that the impugned order passed by the Commissioner was violative of the principles of natural justice for admittedly no opportunity of being heard was granted to the petitioner before the making thereof. He relied upon the judgment of the Supreme Court in C. B. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions of full and true disclosure of his income. In the circumstances, one of the primary conditions for waiver under section 273A(1) is not satisfied. Hence, the petition is rejected. (Sd.) (M. N. Nambiar), Commissioner of Income-tax, KTK-II, Bangalore." A bare perusal of the order shows that the same calls in aid three distinct reasons for the dismissal of the application made by the assessee. In the first place, the order records that the revised return has been filed by the assessee beyond the period within which the return originally filed could have been revised. This reason, it was fairly conceded by Mr. Dattu, is not of much consequence in the context of the requirements of section 273A(1) of the Income-tax Act. Whether or not the return was filed within or beyond the period prescribed for the filing of a revised return, it was agreed on both the sides, was not very germane to the question whether the penalty imposable upon the petitioner should or should not be waived. The second reason which the order records is that the revised return filed by the petitioner-assessee was motivated by search. As to when was the search conducted, in whose business or residential p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n support of the orders made by them. Then alone administrative authorities and Tribunals exercising quasi-judicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process. The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi-judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law." It was next contended by Mr. Rao that the order impugned had been passed by the Commissioner without providing to the petitioner an opportunity of being heard. He submitted that the principles of natural justice required the grant of a hearing to this petitioner before a decision adverse to him could be taken on the same. Mr. Dattu, on the other hand, argued that the proceedings before the Commissioner for waiver under section 273A of the Act were not in the nature of quasi-judicial proceedings and, therefore, no opportunity of hearing under the said provision. In support of this submission, Mr. Dattu pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... just exercise of their power. To prevent the abuse of that power and to see that it does not become a new despotism, courts are gradually evolving the principles to be observed while exercising such powers. In matters like these, public good is not advanced by a rigid adherence to precedents. New problems call for new solutions. It is neither possible nor desirable to fix the limits of a quasi-judicial power. But for the purpose of the present case, we shall assume that the power exercised by the selection board was an administrative power and test the validity of the impugned selections on that basis." The court then assumed that the power which the selection board constituted for selecting candidates for induction into the I. F. S. was an administrative power, but went on to apply the principles of natural justice even to the exercise of such a power and held that an unjust decision in an administrative inquiry may have more far-reaching implication than a decision in a quasi-judicial enquiry, and that while arriving at a just decision in quasi-judicial as well as administrative enquiries, the principles would apply with equal force. The following passage from the judgment may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t some principle of natural justice had been contravened the court has to decide whether the observance of that rule was necessary for a just decision on the facts of that case." In Rasiklal Ranchhodbhai Patel v. CWT [1980] 121 ITR 219 (Guj), the order passed by the Commissioner of Wealth-tax under section 18(2A) of the Wealth-tax Act for waiver of penalty was called in question, inter alia, on the ground that the Commissioner had not recorded any reasons for declining the prayer made by the assessee. A Division Bench of the Gujarat High Court relying upon the judgment in: (i) Woolcombers of India Ltd. v. Woolcombers Workers' Union, AIR 1973 SC 2758; (ii) Siemens Engineering and Manufacturing Co. of India Ltd. v. Union of India, AIR 1976 SC 1785, held that the Commissioner's reasoning was only a pretence and an apology for reasons, wholly insufficient to satisfy the requirements of audi alteram partem. The order passed by the Commissioner was accordingly struck down and the matter remitted back to him for consideration. In Shiv Narain Dhabhai v. CWT [1980] 121 ITR 224 (Raj), a similar question arose for consideration before a Division Bench of the Rajasthan High Court. That was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deciding the application, yet the requirement of giving a hearing flows from the principle of fairness which has to be observed in administrative as well as quasi-judicial proceedings. "Normally", it was observed "hearing" means "oral hearing" at which the party may be represented. But, in a suitable case, the "hearing" may be held on paper by permitting the person concerned to make his representation and the arguments in writing. A personal hearing, it was held, was not always a concomitant of the principles of natural justice. In C. B. Gautam v. Union of India [1993] 199 ITR 530 (SC), the question that fell for consideration of the court was whether, while making a pre-emptive purchase under section 269UD of the Income-tax Act, the Revenue was obliged to grant an opportunity of being heard to the persons concerned against making an order under the said provision. The court noticed that the provisions contained in Chapter XX-C of the Income-tax Act, did not carry with them any requirement of giving the concerned parties an opportunity of being heard before an order for compulsory purchase of the property by the Central Government is made. Relying upon its judgment in A. K. Kraip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reliance by Mr. Dattu, upon a Division Bench judgment of this court in Indian Telephone Industries Co-operative Society Ltd. v. ITO [1972] 86 ITR 566 appears to me to be misplaced. That was a case in which the question that this court was considering was whether an oral hearing to the assessee was imperative. This court observed that such a hearing was not required to be granted, as the nature of power exercisable under section 271(4A) of the Act, which made a similar provision for waiver of penalty at the hands of the Commissioner of Income-tax was not a quasi-judicial power. While there can be no dispute with the proposition that even if the power is quasi-judicial in nature an "oral hearing" to the assessee concerned in all situations cannot be deemed to be necessary, the view taken by this court that the power exercised by the Commissioner under section 271(4A) of the Act was not a quasi-judicial power, appears to me to be per incuriam. The judgment of the Supreme Court in A. K. Kraipah's case, AIR 1970 SC 150, does not appear to have been brought to the notice of their Lordships while deciding the said case. Applying the tests laid down in Kraipak's case, AIR 1970 SC 150 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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