Anupinder Singh V. Commissioner of Income Tax, Patiala and another

CWP/14724/1993

AI Insights

The case involves Anupinder Singh, the petitioner, who was a co-owner of agricultural land acquired by the State Government. Following the acquisition, the petitioner received enhanced compensation, which led to disputes over the applicable interest and penalties under the Income Tax Act for delayed tax return filings. The petitioner argued that the interest charged was unjustified as the exact amount of compensation was not known at the time of the original tax return filings. The Commissioner of Income Tax had partially waived the interest charges up to November 30, 1988, but the petitioner sought a complete waiver, citing precedents that supported his claim. The High Court, after reviewing the submissions and relevant legal provisions, found in favor of the petitioner, leading to the remand of the case for a fresh decision on the matter.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 678500 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 19-07-2012
• Assessment Year: misc
• Other Referred Cases: Shanti Sarup Sharma v. Commissioner of Income Tax and another, Apex Finance and Leasing Limited v. Commissioner of Income Tax and others, Smt.Parkash Devi v. Commissioner of Wealth Tax, Jullundur, Ganesh Trading Co. v. Commissioner of Income Tax and another
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: URVASHI DHUGGA
• Assessee Lawyers: RAJESH GARG
• Keywords: Agricultural land compensation; Income Tax; Interest Waiver; Penalty Waiver; Voluntary Return Filing
• Section: 148; 273-B; 139(2); 271(1)(a); 139(8); 217

Judgement Text

"CWP No.14724 of 1993 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP No.14724 of 1993 Date of decision: 19.07.2012 Anupinder Singh -----Petitioner Vs. Commissioner of Income Tax, Patiala and another ----Respondents CORAM:- HON’BLE MR. JUSTICE AJAY KUMAR MITTAL HON'BLE MR. JUSTICE GURMEET SINGH SANDHAWALIA Present:- Mr. Rajesh Garg, Advocate for the petitioner. Ms. Urvashi Dhugga, Advocate for the respondents. Ajay Kumar Mittal,J. 1. This order shall dispose of Civil Writ Petition Nos. 14724 to 14727 of 1993 as learned counsel for the parties are agreed that the facts and the issue involved are identical in all the petitions. However, the facts are being taken from CWP No.14724 of 1993 which may be briefly noticed. 2. In CWP No.14724 of 1993, the petitioner was co-owner of agricultural land measuring 9 bighas 14 biswas situated in the revenue estate of Village Barewal, District Patiala. The said land was acquired by the State Government on 12.10.1979 and the compensation was determined by the Land Acquisition Collector. CWP No.14724 of 1993 2 The petitioner challenged the award before the District Judge, Patiala. Compensation was enhanced to ` 96,800/- per acre. On further appeal, the amount of compensation was enhanced to ` 2,42,000/- per acre by this Court vide judgment dated 7.10.1988. Aggrieved by the judgment, the State of Punjab filed LPA No.248 of 1989 in this Court which was dismissed on March 8, 1989. The petitioner received compensation from July to November 1989 in two installments. The petitioner filed income tax returns for the assessment years 1982-83 to 1988-89 prior to the issuance of notices either under section 139(2) or under section 148 of the Income Tax Act, 1961 (in short, “the Act”). The assessment was completed on the basis of income declared by the Assessing Officer on 30.4.1991. However, the Assessing Officer charged interest under sections 139(8) and 217 of the Act and also ordered to initiate penalty proceedings under section 271(1) (a) and 273(b) of the Act. The penalty proceedings ordered to be initiated were later on withdrawn. On appeal, the Deputy Commissioner of Income Tax (Appeals) Chandigarh Range Chandigarh deleted the interest charged under sections 139(8) and 217 of the Act in respect of assessment years 1982-83 to 1984-85. The department went in appeal against the said order before the Tribunal. The petitioner moved a petition under section 273A for waiver of interest and penalty imposable/imposed for the assessment years 1983-84 to 1988- 89 on 9.1.1991. According to the petitioner, the returns for the relevant assessment years had been filed voluntarily and in good faith which were accepted by the Assessing Officer. The Commissioner of CWP No.14724 of 1993 3 Income Tax vide order dated 9.2.1993, Annexure P.2 held that the liability to pay tax was known to the assessee on 7.10.1988 and at best he should have filed the returns by 30.11.1988 when he had received the judgment of the High Court on 4.11.1988 but the same were filed on 18.5.1990, thus, there was reasonable cause for delay for the period upto 30.11.1988 and for the remaining period, there was no proper justification for delay in filing the returns. The Commissioner, thus, waived interest under Sections 139(8) and 217 of the Act upto 30.11.1988 only. Hence these petitions. 3. Learned counsel for the petitioners submitted that the enhanced compensation and interest thereon was received and it was on that basis that the returns were filed for the earlier years and since the assessees had not known the exact amount of enhanced compensation and the interest in those years, charging of interest under Sections 139(8) and 217 of the Act in toto should have been waived. He placed reliance upon a Division Bench judgment of this Court in Shanti Sarup Sharma v. Commissioner of Income Tax and another, (1999) 237 ITR 376 to submit that the compensation and interest received from the Government on a subsequent date which was not ascertained at the time of due date for filing of the return for a particular assessment year, the interest under sections 139(8) and 217 of the Act was liable to be waived. Learned counsel further submitted that the Commissioner had erred in partly allowing the petition filed under section 273A of the Act. Once the conditions as enumerated in Section 273A of the Act were fulfilled by the CWP No.14724 of 1993 4 assessee,interest under sections 139(8)/217 of the Act ought to have been waived completely. Reliance was also placed on judgment of the Hon'ble Supreme Court in Apex Finance and Leasing Limited v. Commissioner of Income Tax and others, (1994) 207 ITR 781, Division Bench judgment of this Court in Smt.Parkash Devi v. Commissioner of Wealth Tax, Jullundur, (1983) 141 ITR 122, and Single Bench judgment of this Court in Ganesh Trading Co. v. Commissioner of Income Tax and another, (2004) 265 ITR 495 in support of the contentions. 4. After hearing learned counsel for the parties and perusing the record, we find that the writ petitions deserve to succeed. 5. A Division Bench of this Court while considering the provisions relating to Section 18B of the Wealth Tax Act, 1957 which are pari materia to those in Section 273A of the Act, in Parkash Devi (Smt.) v. CWT (1983) 141 ITR 122, held that the following five conditions are required to be fulfilled:- “1) that the returns were filed by the petitioner prior to the issuance of a notice to her under sub-section (2) of section 14 of the Act; 2) that these were filed voluntarily and in good faith; 3) that the petitioner had made full and true disclosure of her net wealth; 4) that she had cooperated in the inquiry relating to the assessment of her net wealth; and 5) that she had paid or made satisfactory arrangements for the payment of the tax or interest payable in consequence of an order passed under the Act in respect of the relevant assessment years.” CWP No.14724 of 1993 5 6. Further, this Court while delving into the scope of Section 273A of the Act in Shanti Sarup Sharma's case (supra) held as under:- “Section 273A of the Income Tax Act, 1961, empowers the Commissioner to reduce or waive interest and penalty. The power under Section 273A is discretionary. The Commissioner is given the discretion, when the requisite conditions envisaged by that section are satisfied, that he may waive or reduce the penalty or the interest imposable under the Act. However, the exercise of discretion cannot be either arbitrary or capricious and has to be judicious and objective. Section 273A does not confer absolute discretion upon the Commissioner to pass any order which he pleases to make. He is required to consider the application on the merits.” 7. Adjudicating the issue in favour of the petitioner, the Division Bench of this Court observed that the petitioner therein had received compensation in February 1991 and, therefore, there was no justification in charging interest for the earlier period. 8. Adverting to the factual matrix in the present case, the petitioner received the enhanced compensation during the period from July to November 1989 in two installments relating to assessment years 1982-83 to 1988-89. In such a situation, the rejection of the petition on the ground that the assessee had the order of the High Court available with him on 4.11.1988 and so the interest could be waived upto 30.11.1988, would not be correct. It was not disputed that the enhanced compensation and the interest was received between July to November 1989 and the assessee did not CWP No.14724 of 1993 6 know before that the amount which was to be depicted in the income tax return for purposes of tax. The assessee was, thus, entitled for waiver of interest till the date of receipt of enhanced compensation. 9. In view of the above, all the four petitions are partly allowed and it is held that the Commissioner was not right in holding that there was no proper justification for delay after 30.11.1988 in filing return for the assessment years in question. The order Annexure P.2 in all the petitions is set aside to that extent. The matter is remanded to respondent No.1 for passing fresh order in accordance with law keeping in view the observations made hereinabove. (Ajay Kumar Mittal) Judge July 19, 2012 (Gurmeet Singh Sandhawalia) 'gs' Judge "