Lajpat Rai (HUF) and Satya Pal V. The Commissioner of Income Tax, Haryana, Rohtak

CWP/12917/1991

AI Insights

The case involves two petitioners, Lajpat Rai (HUF) and Satya Pal, who challenged the penalties imposed on them for not filing income tax returns for the assessment year 1979-80, as mandated by Section 80(J)(3) of the Income Tax Act, 1961. This section, introduced by the Finance Act No.2 of 1980 with retrospective effect from 01.04.1972, required the filing of returns. The petitioners argued that they were under the bonafide belief that they were not required to file returns due to ongoing legal challenges against the vires of Section 80J. The respondents, represented by the Commissioner of Income Tax, contended that the petitioners were correctly penalized as the law was applicable retrospectively. The court upheld the penalties, stating that the petitioners had failed to meet their statutory obligations and had not provided sufficient justification for their non-compliance.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 674496 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 03-09-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: YOGESH PUTNEY
• Assessee Lawyers: ANAND CHHIBBAR; SUPRIYA GARG
• Keywords: Income Tax; Non-filing of return; Penalty; Section 80J; Finance Act No.2 of 1980
• Section: 148; 143(3); 274; 273; 80(J)(3)

Judgement Text

"Civil Writ Petition No.12917 of 1991 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH (1) Civil Writ Petition No.12917 of 1991 Date of Order: 03.09.2013 Lajpat Rai (HUF), Faridabad ...Petitioner Versus The Commissioner of Income Tax, Haryana, Rohtak and another. ..Respondents (2) Civil Writ Petition No.13191 of 1991 Satya Pal ...Petitioner Versus The Commissioner of Income Tax, Haryana, Rohtak and another. ..Respondents CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON Present: Mr. Anand Chhibbar, Senior Advocate with Ms. Supriya Garg, Advocate for the petitioner. Mr. Yogesh Putney, Advocate, for the respondents. RAJIVE BHALLA, J (Oral) By way of this order, we shall dispose of Civil Writ Petition Nos.12917 and 13191 of 1991, as they involve adjudication of the same questions of fact and law. Facts, necessary for adjudication of the writ petitions are being taken from Civil Writ Petition No.12917 of 1991. Counsel for the petitioner submits that as in assessment Kumar Naresh N 2013.09.23 15:11 I attest to the accuracy and integrity of this document High Court Chandigarh Civil Writ Petition No.12917 of 1991 -2- year 1979-80, the petitioner was not liable to file return with respect to income, in accordance with Section 80(J)(3) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'), the imposition of penalty is not warranted. Section 80(J)(3) of the Act was introduced by Finance Act No.2 of 1980 with retrospective effect from 01.04.1972. The petitioner was of a bonafide belief that in view of pendency of challenge to the vires of Section 80J of the Act, before the High Court, he was not required to file a return. The penalty and interest may, therefore, be waived. Mr. Yogesh Putney, Advocate, for the respondents, submits that as Section 80(J)(3) was amended by Finance Act No.2 of 1980 with effect from 01.04.1972, the petitioner cannot take any benefit and, therefore, has rightly been directed to pay penalty. The order passed by the Assessing Officer as well as the revisional authority are legal and valid and should, therefore, be affirmed. We have heard counsel for the parties, perused the impugned orders and find no reason to interfere with the impugned orders. The petitioner having failed to discharge his statutory obligation to file a return, a penalty was proposed to be levied. The Assessing Officer, vide order dated 31.03.1989 imposed penalty. An extract from the order reads as follows:- “Notice u/s 274 read with section 273 of the Act requiring the assessee to show cause as to why an order imposing a penalty should not be made was issued and it was duly served upon the assessee. Kumar Naresh N 2013.09.23 15:11 I attest to the accuracy and integrity of this document High Court Chandigarh Civil Writ Petition No.12917 of 1991 -3- The assessee was provided with a fresh opportunity of hearing under this office letter dated 2.8.1988 and 9.12.1988. In response to these letters Shri J.L.Mamhotra, CA attended the proceedings and the hearing was adjourned to 27.1.1989 at his request. No body attended on this date nor any written reply has been received so far. Perusal of the record shows that the assessee main source of income is one-half share from M/s Haryana Steel Fabricator, Faridabad, in which he is a partner. It is also noticed that the return in the case of the firm was received on 30.09.1979 and the assessment was made on total income of Rs.91,580/- u/s 143(3) of the Income Tax Act, 1961 vide assessment order dated 21.1.1981. Despite this, the assessee did not file his return and ultimately proceedings u/s 141 were initiated and notice u/s 148 was served upon the assessee on 18.09.1984. In these circumstances, I hold that the assessee had without reasonable cause failed to furnish his return of income within time. I, therefore, direct the assessee to pay a sum of Rs.23,260/- (Rs. Twenty three thousand two hundred & sixty only) by way of penalty as per following calculations:- Total tax payable : Rs.18,759 Return late by 62 Kumar Naresh N 2013.09.23 15:11 I attest to the accuracy and integrity of this document High Court Chandigarh Civil Writ Petition No.12917 of 1991 -4- complete months, penalty imposed @ 2% : Rs. 23,260 per month. R.O. Rs.23,260/- Demand notice and challan shall be issued.” The revision filed by the petitioner was also dismissed. The petitioner's plea relating to ignorance of the affect of Section 80J of the Act or the pendency of a matter relating to vires of Section 80J of the Act may have been accepted, if the petitioner had offered an explanation before the Assessing Officer. The petitioner did not appear before the Assessing Officer to offer any explanation and, therefore, cannot be allowed to raise a fresh plea in proceedings under Article 226 of the Constitution of India. The Assessing Officer and the revisional authority have dealt with the petitioner's default and the lack of bonafides. We find no reason to hold that orders passed by the Assessing Officer or the revisional authority suffer from any error of jurisdiction or of law as would require interference. Dismissed. (RAJIVE BHALLA) JUDGE September 03, 2013 (DR. BHARAT BHUSHAN PARSOON) nt JUDGE Kumar Naresh N 2013.09.23 15:11 I attest to the accuracy and integrity of this document High Court Chandigarh "