Dr. Santosh Rani Batra V. Commissioner of Income Tax, Patiala and another

CWP/4332/1993

AI Insights

Dr. Santosh Rani Batra, the petitioner, sought a writ of certiorari to quash the order dated 08.12.1992 by the Commissioner of Income Tax, Patiala, which dismissed her application for waiver of penalty and interest imposed following the assessment of her income tax returns for the years 1985-86 to 1989-90. The petitioner argued that her returns were filed voluntarily and without any notice under Sections 139 or 148 of the Income Tax Act, 1961, and that she met the conditions for waiver under Section 273-A of the Act. The respondents contended that the returns were not filed voluntarily as they were submitted only after the concealed income was detected during a survey of the petitioner's husband. The court found that the Commissioner had not adequately considered the petitioner's voluntary disclosure and the specific conditions of Section 273-A in his decision.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 675368 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 16-08-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: URVASHI DHUGGA
• Assessee Lawyers: SUPRIYA GARG
• Keywords: Concealed income; Income Tax Returns; Survey Proceedings; Waiver of penalty; Voluntary filing
• Section: 148; 139; 273; 271; 133-A; 273-A

Judgement Text

"CWP No.4332 of 1993 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP No.4332 of 1993 Decided on: 16.08.2013 Dr.Santosh Rani Batra ..... Petitioner VERSUS Commissioner of Income Tax, Patiala and another ..... Respondents CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON Present: Ms.Supriya Garg, Advocate, for the petitioner. Ms.Urvashi Dhugga, Advocate, for the respondents. ******* RAJIVE BHALLA, J. The petitioner prays for issuance of a writ of certiorari quashing order dated 08.12.1992, passed by the Commissioner of Income Tax, Patiala, dismissing the petition for waiver of penalty and interest. Counsel for the petitioner submits that the petitioner filed income tax returns for the years 1985-86 to 1989-90 voluntarily without any notice under Sections 139 or 148 of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') and paid income tax as assessed. The assessment was framed on 29.12.1989 by levying penalty and interest. As the petitioner fulfilled conditions laid down in Section 273-A of the Act, she filed an application for waiver or refund of penalty/interest. The application was dismissed without considering the fact that the returns were filed voluntarily and without issuance of notice under Sections 139 or 148 of the Act. It is further submitted that as the CWP No.4332 of 1993 -2- petitioner satisfies factors set out in Section 273-A of the Act, the impugned order based upon a survey conducted under Section 133- A of the Act against the petitioner's husband, cannot be a ground to deny relief to the petitioner. It is further submitted that if factors relied by the Assessing Officer while imposing penalty are to determine exercise of jurisdiction under Section 273-A of the Act, proceedings under Section 273-A, would be rendered meaningless. Counsel for the revenue submits that during survey proceedings, against the petitioner's husband certain accounts and fixed deposits, in the joint names of the petitioner and her husband were discovered. The filing of returns thereafter cannot be said to be voluntary so as to invite consideration under Section 273-A of the Act. The petitioner and her husband did not file returns and it was only when the concealed income was detected, did the petitioner file returns. The application, under Section 273-A of the Act, has, therefore, been rightly rejected. We have heard counsel for the parties, perused the pleadings as well as the impugned order and as dispute, in the present case, relates to power conferred upon a Commissioner of Income Tax under Section 273-A of the Act, would before we adjudicate the dispute on merits, reproduce Section 273-A of the Act, which reads as follows: - “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 sub-section (1) of section 271 for 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 CWP No.4332 of 1993 -3- (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 a 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 the issue of such notice has expired, prior to the 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), co- operated 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.[***]: For the purposes of this sub-section, 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 attract the provisions of clause (c) of sub-section (1) of section 271. (2) Notwithstanding anything contained in sub-section (1),— (a) if in a case the penalty imposed or imposable under clause (i) of sub- section (1) of section 271 or the minimum penalty imposable under section 273 of 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 sub-section (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 CWP No.4332 of 1993 -4- waiving the penalty under sub-section (1) shall be made by the Commissioner except with the previous approval of the Board. (3) Where an order has been made under sub-section (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 co-operated in any inquiry 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 sub-section 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.” A perusal of Section 273-A of the Act, reveals that the case of the petitioner falls under Section 273-A(1)(ii)(a)(b) of the Act and, therefore, required the Commissioner of Income Tax to consider if the petitioner disclosed income prior to issuance of notice under Section 139(2) of the Act voluntarily and made full disclosure of her income in good faith etc. Section 273-A of the Act commences with the words “notwithstanding anything contained in this Act” thereby postulating that the Commissioner shall while considering an application under Section 273-A of the Act, confine his consideration to factors referred to in Section 273-A of the Act CWP No.4332 of 1993 -5- and to no other factor. Thus, if the Commissioner while exercising power under Section 273-A of the Act places sole reliance upon grounds that led to imposition of penalty and interest, such an exercise of power, would in essence, be contrary to power conferred by Section 273-A of the Act. While exercising power under Section 273-A of the Act the Commissioner is required to confine his consideration to factors set out in the sub-sections of Section 273-A of the Act and to no other factor. A perusal of the impugned order reveals that before passing the order, the Commissioner obtained a report dated 23.01.1982 from the Deputy Commissioner of Income Tax, Chandigarh Range, Chandigarh, which clearly records that income tax returns were filed voluntarily. The Commissioner of Income Tax ignored this report, as well as the fact that survey proceedings were conducted against the petitioner's husband and not against the petitioner. The Commissioner has failed to consider that no notice under Section 139(8) or Section 139 or Section 148 of the Act was ever served upon the petitioner before she filed her returns. The Commissioner has while holding that the return was not voluntary as it was filed only after it was called for by the Income Tax Department, ignored the fact that no such notice or order is available on record. In view of what has been recorded hereinabove, the writ petition is allowed, the impugned order is set aside and the matter is remitted to the Commissioner of Income Tax, Patiala, for deciding the application filed under Section 273-A of the Act, afresh and in accordance with law. CWP No.4332 of 1993 -6- Parties are directed to appear before the Commissioner of Income Tax, Patiala, on 23.09.2013. [ RAJIVE BHALLA ] JUDGE 16.08.2013 [ DR. BHARAT BHUSHAN PARSOON ] shamsher JUDGE Singh Shemsher 2013.09.05 12:23 I attest to the accuracy and integrity of this document Chandigarh "