Mrs. SHARADA PULLELA VS COMMISSIONER OF INCOME-TAX, 2002 PTD-MADHYA-PRADESH-HIGH-COURT-INDIA 1225 (1998)

Income-tax---

----Penalty---Interest---Waiver or reduction of penalty or interest-- Commissioner of Income-tax must decide application for such waiver or rejection on merits---Rejection of application without application of mind is not valid---Indian Income Tax Act, 1961, S.273A.

Section 273A of the Income Tax Act, 1961, itself contains criteria in clauses (a), (b) and (c) appearing in subsection (1) thereof for recording satisfaction about existence of the conditions contained therein and taking a decision in the matter.

Held, that, in the instant cases, there was no application of mind by the Commissioner of Income-tax to the requirements of section 273A. The rejections of applications under section 273A were not valid.

JUDGMENT

This petition has been filed challenging the order of the Commissioner of Income-tax (Annexure "G"), by which he has rejected the application of the petitioner for waiver of the penalty and interest filed under section 273A of the Income Tax Act, 1961 (hereinafter referred to as "the Act").

Section 273A in the relevant years read as under;

"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-

(i) reduce or waive the amount of penalty imposed or imposable on a person under clause (i) of subsection (1) of section 271 for failure, without reasonable cause, to furnish the return of total income which he was required to furnish under subsection (1) of section 139; or

(ii) reduce or, waive the amount of penalty imposed or imposable on a person under clause (iii) of subsection (Z) of section 271; or

(iii) reduce or waive the amount of interest paid or payable under subsection (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 a notice to him under subsection (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 subsection (2) of section 139, or where no such notice has been issued and the period for the issue of such notice has expired, prior to issue of notice to him under section 148, voluntarily and in good faith made full and true disclosure of his income and has paid the tax on the income so disclosed,

and also has, in all the cases referred to in clauses (a), (b) and (c), cooperated in any enquiry relating to the assessment of his income and has either paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year.

Explanation 1.---For the purpose of this subsection, a person shall be deemed to have made full and true disclosure of his income or of the particulars relating thereto in any case where the excess of income assessed over the income returned is of such a nature as not to attest the provisions of clause (c) of subsection (1) of section 271.

(2) Notwithstanding anything contained in subsection (1),

(a) if in a case the penalty imposed or imposable under clause (i) of subsection (1) of section 271 or the minimum penalty imposable under section 273 for the relevant assessment year, or, where such disclosure relates to more than one assessment year, the aggregate of the penalty imposed or imposable under the said clause or of the minimum penalty imposable under the said section for those years, exceeds a sum of one hundred thousand rupees, or

(b) if in a case falling under clause (c) of subsection (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 subsection (1) shall be made by the Commissioner except with the previous approval of the Board.

(3) Where an order has been made under subsection (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.

(4) Without prejudice to the powers conferred on him by any other provision of this Act, the Commissioner may, on an application made in this behalf by an assessee, and after recording his reasons 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 cooperated in any enquiry relating to the assessment or any proceeding for the recovery of any amount due from him:

Provided that where the amount of any penalty payable under this Act or, where' such application relates to more than one penalty, the aggregate amount of such penalties exceeds one hundred thousand rupees, no order reducing or waiving the amount or compounding any proceeding for its recovery under this subsection shall be made by the Commissioner except with the previous approval of the Board.

(5) Every order made under this section shall be final and shall not be called into question by any Court or any other authority."

Section 273A itself contains criteria in clauses (a), (b) and (c) appearing in subsection (1) thereof for recording satisfaction about existence of the conditions contained therein and taking a decision in the matter. Learned counsel, for the petitioner has produced the original copy of the impugned order as was received by the petitioner, which indicates that except for the first two pages and the last page of the impugned order (Annexure G), reasons are contained in cyclostyled pro forma inserted between these pages, which does not depict any application of mind to the requirement of section 273A of the Act. Learned counsel for the Revenue was unable to point out from the impugned order containing common reasons, in similar applications filed by the petitioner, in cyclostyled pro forma that mind was applied by the learned Commissioner of Income-tax on the objective criteria laid down in the provisions in connection with each and every application to come to his independent conclusion thereon. The matter, therefore, deserves to be remanded to the learned Commissioner of Income -tax for his decision afresh on each application under section 273A of the Act since separate application has been filed for each assessment year.

Consequently, this petition is allowed and the order (Annexure G) passed by the respondent is set aside and the respondent is now directed to consider and decide the applications under section 273A of the Act in accordance with law. The amount of security deposit, if outstanding, be refunded to the petitioner, There shall be no order as to costs.

M.B.A./608/FC Petition allowed.