null V. Commissioner of Income Tax-1, Visakhapatnam

WP/25544/2001

AI Insights

The case revolves around a petition challenging the order of the Commissioner of Income Tax-1, Visakhapatnam, which rejected the petitioner's application for waiver of penalty under Section 273-A (4) of the Income Tax Act, 1961. The petitioner had previously sought this waiver for the assessment years 1983-84 to 1986-87, which was initially denied in 1993. After a remand by the High Court in 2000, the Commissioner again rejected the waiver request in 2001, leading to the current writ petition. The main legal contention was whether the Commissioner correctly applied the provisions of Section 273-A (4) in assessing the petitioner's financial hardship and compliance with the law.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 810795 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 05-03-2020
• Assessment Year: misc
• Other Referred Cases: W.P.No.14904 of 1993
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: M
• Keywords: Assessment Year; Financial Position; Genuine hardship; Waiver of penalty
• Section: 273(1)(c); 273(A)(4)

Judgement Text

"THE HON'BLE SRI JUSTICE A.V.SESHA SAI AND THE HON'BLE SRI JUSTICE R.RAGHUNANDAN RAO WRIT PETITION No.25544 of 2001 ORDER: (per Hon’ble Sri Justice A.V.Sesha Sai) Heard learned counsel for the petitioner and Smt.M.Kiranmayee, learned Standing Counsel for Income Tax, appearing for the respondents, apart from perusing the entire material available on record. 2. Order, bearing No.Hqrs.No.IC/6/2000-01, dated 03.09.2001, passed by the Commissioner of Income Tax-1, Visakhapatnam, under Section 273-A (4) of the Income Tax Act, 1961 (for brevity, ‘the Act’), is under challenge in the present Writ Petition. 3. Petitioner herein filed an application, under the above said provision of law, on 31.12.1986, requesting for waiver of the penalty, levied under Section 273 (1) (c) of the Act, for the assessment year, 1983-84 to 1986-87. The said application was rejected by the Commissioner of Income Tax, vide order, dated 04.03.1993. The said order was carried to this Court, by way of filing W.P.No.14904 of 1993, and a Division Bench of this Court, vide order, dated 27.04.2000, disposed of the said Writ Petition and remitted the matter back to the Commissioner for fresh consideration. After the said 1 remand, the order impugned in the present Writ Petition came to be passed by the Commissioner of Income Tax on 03.09.2001, once again rejecting the application, for waiver of penalty, filed by the petitioner herein. 4. According to the learned counsel for the petitioner, the order impugned in the present Writ Petition is highly erroneous, contrary to law and not in consonance with the provisions of Section 273-A (4) of the Act. In elaboration, it is further contended that the Commissioner ought to have taken into consideration the situation existing as on the relevant date but not the subsequent financial position. It is also the submission of the learned counsel that, since the petitioner herein, admittedly, fulfilled clause (ii) of Section 273-A (4) of the Act, the Commissioner ought to have granted waiver in favour of the petitioner herein. 5. On the other hand, it is contended by the learned Standing Counsel that there is absolutely no error nor there exists any infirmity in the impugned order and, in the absence of the same, the impugned order does not warrant any interference of this Court under Article 226 of the Constitution of India. It is also the submission of the learned Standing Counsel that the assessee needs to satisfy both the clauses (i) and (ii) of Section 273-A (4) of the Act and compliance of one of the clauses cannot be a ground for invoking the said provision 2 of law. 6. As stated supra, earlier, when an order was passed by the Commissioner of Income Tax, on 04.03.1993, rejecting the request of the petitioner for waiver, W.P.No.14904 of 1993 came to be filed by the petitioner herein. A copy of the said order is filed along with the Writ Petition as material paper. In the said order, a Division Bench of this Court, while observing that the reasons assigned by the Commissioner were either irrelevant or non-existent, remitted the matter to the Commissioner with an observation that it would be open for the Commissioner to call for information regarding the latest assets position and financial capacity of the assessee. 7. A perusal of the order under challenge in the present Writ Petition discloses, in clear and vivid terms, that the Commissioner, after taking into consideration the investments made by the assessee and the period of completion of construction of the said flats, came to the conclusion that there was no genuine hardship to the assessee. There is absolutely no dispute with regard to the said factual findings arrived at by the Commissioner. In this context, it may also be relevant to refer to the provisions of Section 273-A (4) of the Act, which read as under: (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 3 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 inquiry relating to the assessment or any proceeding for the recovery of any amount due from him: 8. It is no doubt true that the assessee extended his cooperation in the enquiry relating to the assessment and the said fact does not automatically lead to entitlement, under the said provision of law, for waiver. It is also incumbent on the part of the assessee to show and demonstrate the genuine hardship which, according to the Commissioner of Income Tax, was not shown by the assessee. 9. Having regard to the observations made by the Division Bench of this Court, in the earlier Writ Petition, the findings recorded by the Commissioner of Income Tax, in the impugned order, and having regard to the language employed in Section 273-A (4) of the Act, this Court is not inclined to interfere with the order passed by the Commissioner of Income Tax. It is also made clear that, in the earlier round of litigation, since this Court had set aside the order of the Commissioner of Income Tax, dated 04.03.1993, by way of the order, dated 27.04.2000, respondent authorities are entitled to collect the interest from the date of the impugned order in the Writ Petition. 4 10. Accordingly, Writ Petition is disposed of. There shall be no order as to costs. 11. As a sequel thereto, miscellaneous petitions, if any, shall stand closed. __________________ A.V.SESHA SAI,J _________________________ R.RAGHUNANDAN RAO, J 05th March, 2020. Tsy 5 "