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TMI Blog1999 (9) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee Shri A.V. Krishna Murthy and the learned Departmental Representative Shri Shaji P. Jacob. Their arguments and the case law relied upon by them in support of their contention to cancel the penalty and to confirm the penalty have been taken -into consideration. I have also considered the copies of letters addressed by the AO to the assessee dt. 30th March, 1995, and the explanation of the assessee dt. 28th Feb., 1992. 3. The appellant made an application on 15th Feb., 1993, to the CIT to waive the entire penalty levied under s. 271(1)(c) by the AO, under the provisions of s. 273A(4) of the IT Act, 1961. 4. The assessee filed return of income voluntarily for the asst. yr. 1988-89 on 29th July, 1988. A search was conducted on 11th S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal position he is entitled to cancellation of the balance of Rs. 23,490 from the total penalty of Rs. 63,490. He took me through s. 271(1)(c) Expln. 5(a), which reads as follows: "Explanation 5- Where in the course of a search under s. 132, the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing (hereinafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income,- (a) for any previous year which has ended before the date of the search, but the return of income for such year has not been furnished before the said date or, where such return has been furnished before the said date, such inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This power compared to the other powers conferred on a first appellate authority an enumerated in cls. (a) and (c) of the same provision in respect of an appeal against the order of assessment or in residual matters is not as wide as in the remaining two clauses and is restricted to either confirm or cancel a penalty order or vary it so as either to enhance or reduce the penalty. While, therefore, the basis of the imposition of penalty could not have been changed by the CIT(A), in instant appeal could be allowed even on the count on which penalty was imposed by the CIT(A). 8. In the instant appeal the basis of imposition of penalty is not changed by the CIT(A). Therefore, the decision of the Tribunal, Allahabad is distinguishable on fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acob vehemently argued that the assessee is not entitled to avail of parallel remedies of making an application for waiving the penalty under s. 271(1)(c) before the CIT under s. 273A(4) and by filing an appeal before the Tribunal to cancel the penalty fully. According to him there would not be any sanctity to the order of the CIT, who waived the penalty to the extent of Rs. 40,000 and directed to pay the balance out of Rs. 63,490 immediately. The assessee did not comply with his order. There is no doubt that the assessee can avail of as many parallel remedies as available to him. But while so availing the assessee has to disclose the full and true facts. It appears from the order of the CIT passed under s. 273A that the appellant did not d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. The learned Departmental Representative has relied on the decision of Calcutta High Court in the case of Smt. Ichhabai Panchal vs. CWT (1981) 24 CTR (Cal) 292 : (1987) 137 ITR 232 (Cal). The Calcutta High Court in that case held that the expression 'notwithstanding" in s. 18(2A) of the WT Act, 1957, makes it clear that only on the fulfilment of the conditions where penalty was imposable under cl. (a), (b) or (c) or s. 18(1), the power of the CWT to reduce or waive the penalty arises. The moment the assessee chooses to go to the CWT for a reduction or waiver of penalty, he admits the position that penalty was imposable. If on the basis, any order is passed, he cannot feel aggrieved by such an order. In exercising his power under s. 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tmental Representative is of Allahabad High Court in the case of Jyothi Steels vs. CIT Anr. (1987) 63 CTR (All) 347: (1987) 166 ITR 558 (All). On p. 564 at para (2) the Allahabad High Court observed as follows: "When a taxpayer approaches the CIT under s. 273A, including under sub-s. (4) of that section, he impliedly admits his liability to penalty but asks for remission or reduction thereof, relying upon mitigating circumstances arising in a given case. It may be that having regard to the circumstances of a case, the CIT may direct that penalty proceedings may be dropped, while in another case, a partial reduction of penalty alone may meet the ends of justice." 16. Thus the partial waiver of penalty has met the ends of justice in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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