9911796707
TMI Blog1991 (12) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... . On March 27, 1986, during the currency of the amnesty scheme, the petitioner filed revised returns. The income-tax assessments in relation to the petitioner for the assessment years 1982-83, 1983-84 and 1984-85 were completed by the first respondent, Income-tax Officer, D-Ward, Circle-II, Vijayawada, and he levied interest in respect of the completed assessments under sections 139(8) and 217 of the Income-tax Act as detailed below : ----------------------------------------------------------------------------------------------------------------------------------------------- Assessment Date of completion Interest under Interest under year of assessment section 139 (8) section 217 --------------------------------------------------------------------------------------------------------------------------------------------------- (Rs.) (Rs.) 1982-83 25-3-1987 6,310 6,794 1983-84 25-3-1987 5,648 2,688 1984-85 25-3-1987 4,719 6,041 --------------------------------------------------------------------------------------------------------------------------------------------------- 16,677 15,528 --------------------------------------------------------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y objectionable is the view that the returns were filed by the petitioner, out of fear, and therefore, they are not voluntary. Opposing these contentions, Shri S. R. Ashok, learned standing counsel for the Revenue, asserts that the conduct of the petitioner disentitles him from claiming the benefit of waiver of interest under section 273A. A return filed after the survey operations have commenced will lose its voluntariness ; fear of detection of concealed income was the real motive that prompted the petitioner to file the revised returns and, therefore, they are neither voluntary returns nor can good faith be discerned in them. Before considering the rival contentions advanced before us, it is necessary to notice section 273A which confers power on the Commissioner to reduce or waive penalty and interest in certain cases. In so far as the power to waive interest is concerned, the material portion of the section reads : " 273A. Power to reduce or waive penalty, etc., in certain cases. (1) Notwithstanding anything contained in this Act, the Commissioner may, in his discretion, whether on his own motion or otherwise, -. . . (iii) reduce or waive the amount of interest paid or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to have been borrowed by the assessee as disclosed in the original returns. In fact, it was only on August 4, 1986, long after the revised returns were filed by the assessee, that such a letter was issued by the Income-tax Officer. On July 9, 1986, summons were issued under section 137 of the Income-tax Act to the petitioner to produce the day book, ledger and bank account copies for the three periods specified therein, on July 11, 1986. The proceedings as recorded by the Income-tax Officer on July 11, 1986, disclose that, in response to the summons issued on July 9, 1986, the managing partner of the petitioner-firm was present and he was requested to produce the 18 persons said to be the creditors of the firm on July 16, 1986. The managing partner was also examined on July 11, 1986. On July 16, 1986, the matter was adjourned to July 17, 1986, as the officer was on leave. A representation was made by the petitioner for a short adjournment to July 23, 1986, to produce the creditors and, accordingly, the request was granted. On July 23, 1986, a letter was filed before the Income-tax Officer stating that revised returns were filed for the relevant years. It was only after the revis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r became aware of the said report. In a case where a return was filed by an assessee after he was apprised of any adverse material leading to a real apprehension of penal action against him, his return could not be construed to be voluntary within the meaning of section 273A(1). But that is not the fact situation here. Survey operations followed by enquiries which have not even progressed to the extent of the assessee being apprised of the alleged adverse material collected against him could not be construed as relevant factors for rejecting the returns filed by such an assessee as not voluntary if they contained "full and true disclosure of his income. " The second ground on which the impugned order is based, viz., that it was out of fear because of survey operations, that the petitioner made the disclosure, slides into the first ground to a very large extent, the exclusionary part being fear as the motive prompting the assessee to file the return. We think, this ground is totally irrelevant. There is no basis for presuming that free will or a sense of commitment to the well being of the State always propels the citizens to pay taxes. An honest and well-informed citizen never co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly show that there was little scope for the assessee to escape from the penal consequences and so, very rightly, the Commissioner of Income-tax held that the return filed was not voluntary under section 273A. The Allahabad High Court, after distinguishing the decision of the Gujarat High Court in Madhukar Manilal Modi v. CWT [1978] 113 ITR 318 wherein it was held that the word "voluntary" applies to disclosure of wealth but not, to filing of returns, sustained the action of the Commissioner, in the particular facts of that case, in refusing to grant relief under section 273A. The earlier view of the Allahabad High Court in Mool Chand Mahesh Chand v. CIT [1978] 115. ITR 1 that a return filed in order to save oneself from a possible penal action cannot be termed as " voluntary" was followed. The facts in Hakam Singh's case [1980] 124 ITR 228 (All) are neither parallel nor similar to the facts of the case on hand and, therefore, the finding that the return filed in that case was not " voluntary" could not constitute a valid ground for refusal by the second respondent-Commissioner to exercise discretion under section 273A. The decision of the Gujarat High Court in Madhukar Manilal M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turns for all the years were filed by the assessee without the issuance of any statutory notice. The Commissioner waived penalties for the assessment years 1970-71 and 1971-72 but declined to grant the relief for the remaining years. As the petitioner had correctly disclosed the particulars of his land in returns which he filed before the statutory notices were issued, the Punjab and Haryana High Court ruled that the return filed was voluntary and, on that view, set aside the order of the Commissioner of Wealth-tax. In S. R. Jadav Desai v. WTO [1980] 121 ITR 531, the Karnataka High Court had taken the view that if, without notices, returns were filed under the Wealth-tax Act without any compulsion, they must be treated as voluntary returns. The following statement of law enunciated by Venkataramiah J., (as he then was), in Shankara Apaya Swami v. WTO [1976] 103 ITR 649, 652 (Kar) : "The expression 'voluntarily' means 'without compulsion' and 'good faith' means 'with due care and caution'. Hence, if the return filed by the assessee does not show that he has deliberately furnished wrong particulars about his wealth or deliberately omitted to include all the items of taxable wealt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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