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TMI Blog1981 (4) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... Act to the Commissioner of Income-tax, Jullundur, praying that the, amount of penalty imposable under s. 271 of the Act for failure to file the return within time be waived. The petitioner had deposited the tax due for that year. He also co-operated with the department for assessment purposes. No notice under s. 139(2) of the Act had been issued to the petitioner. The ITO initiated proceedings for the levy of penalty under s. 271(1)(a) of the Act and issued directions for charging of interest under s. 139(8) of the Act, vide order dated 21st November, 1978, because the Commissioner had not disposed of the petitioner's application under s. 273A of the. Act till 21st November, 1978. Those proceedings are still pending. The Commissioner rejected the application of the petitioner under s. 273A of the Act, vide his order dated 13th March, 1979, on the ground that the, petitioner was being taxed regularly since 1970-71, and for that reason the return filed was not voluntary. The petitioner challenged this order through Civil Writ Petition No. 1675 of 1979. The case came up for hearing before a Bench consisting of R. N. Mittal and J. V. Gupta JJ. After hearing the learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. The facts in the other three petitions are also similar. It will be apposite to notice the statutory provisions at this stage: "139. (1) Every person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall furnish a return of his income or the income of such other person during the previous year in the prescribed form and verified ill the prescribed manner and setting forth such other particulars as may be prescribed (a) in the case of every person whose total income, or the total income of any other person in respect of which he is assessable under this Act, includes any income from business or profession, before the expiry of four months from the end of the previous year or where there is more than one previous year, from the end of the prevoius year which expired last before the commencement of the assessment year, or before the 30th day of June of the assessment year, whichever is later (b) in the case of every other person, before the 30th day of June of the assessment year : Provided that, on an application mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed form and verified in the 'prescribed manner and setting forth such other particular as may be prescribed: Provided that, on an application made in the prescribed manner, the Income-tax Officer may, in his discretion, extend the date for furnishing the return, and, notwithstanding that the date is so extended, interest shall be chargeable in accordance with the provisions of sub-section (8)... "271. (1) If the Income-tax Officer or the Appellate Assistant Commissioner or the Commissioner (Appeals) in the course of any proceedings under this Act, is satisfied that any person (a) has without reasonable, cause failed to furnish the return of total income which he was required to furnish under sub-section (1) of section 139 or by notice given under sub-section (2) of section 139 or section 148 or has without reasonable cause failed to furnish it within the time allowed and in the manner required by subsection (1) of section 139 or by such notice, as the case may be, or (b) has without reasonable cause failed to comply with a notice under sub-section (1) of section 142 or sub-section (2) of section 143 or fails to comply with a direction issued under sub-section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 imposable on a person under clause (iii) of sub-section (1) of section 271 ; or (iii) reduce or waive the amount of interest paid or payable under sub-section (8) of section 139 or section 215 or section 217 or the penalty imposed or imposable under section 273, if he is satisfied that such person (a) in the case referred to in clause (i), has, prior to the issue of notice to him under sub-section (2) of section 139, voluntarily and in good faith made full and true disclosure of his income ; (b) in the case referred to in clause (ii), has, prior to the detection by the Income-tax Officer, of the concealment of particulars of income or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, made full and true disclosure of such particulars; (c) in the cases referred to in clause (iii), has, prior to the issue of a notice to him under sub-section (2) of section 139, or where no such notice has been issued and the period for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for so doing, reduce or waive the amount of any penalty payable by the assessee under this Act or stay or compound any proceeding for the recovery of any such amount, if he is satisfied that (i) to do otherwise would cause genuine hardship to the assessee, having regard to the circumstances of the case ; and (ii) the assessee has co-operated in any enquiry relating to the assessment or any proceeding for the recovery of any amount due from him. (5) Every order made under this section shall be final and shall not be called into question by any court or any other authority. " Mr. Ashok Bhan, the learned counsel for the petitioners, has argued that the petitioners had complied with all the requirements of s. 273A. Returns had been filed and the petitioners had voluntarily and in good faith made full and true disclosure of their income before the issuance of any notice under s. 139(2) or under s. 148 of the Act. The Commissioner had misdirected himself in law when he held that the specific knowledge with the ITO that the assessee was enjoying a taxable income would be constraint on the assessee to file a return or to make a declaration of the income. He contended that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it stood before the amendment, which is in pari materia with s. 273A, Rajindra Nath Mittal J. in Dr. Paramjit Singh Grewal v. CIT [1980] 125 ITR 549 held (headnote): "Under s. 271(4A) of the I.T. Act, 1961, penalty imposable oil an assessee can be waived in the cases referred to in cl. (i) if the Commissioner is satisfied, firstly, that the assessee has voluntarily and in good faith made full disclosure of his income prior to the issue of notice to him tinder s. 139(2), secondly, that the assessee co-operates in an enquiry relating to the assessment of such income and, thirdly, has either paid or made satisfactory arrangement for the payment of tax or interest payable ill consequence of an order passed tinder the Act in respect of the relevant assessment year, The Act nowhere provides that if the person concerned is an assessee in the previous years and had been submitting returns, he is not entitled to the benefit of the section. If that had been the intention of the Legislature it would have specifically said so in the Act. Further, the provisions of a taxing statute have to be construed strictly. If the person marking an application under the section fulfils the requirements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o exercise the discretion vested in him by law and the assessee was entitled to succeed." The same Bench interpreted the provisions of s. 271(4A) in Transport Co. Ltd. v. CIT [1978] 113 ITR 360 (Guj) as under (p. 362): " Now, we had today an occasion to deal with a case arising under section 18(2A) of the Wealth-tax Act, which provision is identical to the provision of section 271(4A) of the Act tinder consideration (see Special Civil Application No. 1265 of 1975 decided on February 16/17, 1978 since reported as Madhukar Manilal Modi v. Commissioner of Wealth-tax [1978] 113 ITR 318 (Guj). In that case also on a similar ground the relief under section 18(2A) was rejected by the Commissioner. On a true construction of section 18(2A), we have there held that the word 'voluntarily' occurring in the relevant statutory provision has to be read with I made full disclosure of his net wealth' and that the concept of voluntary filing of return is irrelevant for the purpose of grant of relief except to the extent that it must be shown that the return was not filed pursuant to a notice issued under section 14(2). Since the language of section 18(2A) and section 271(4A) is in pari materia s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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