RAM JI DASS V. COMMISSIONER OF INCOM TAX JALLANDHAR& OTH

CWP/18629/1991

AI Insights

The case involves Ramji Dass, the petitioner, who received compensation for compulsory acquisition of his land under the Defence of India Act, 1971, and voluntarily disclosed this income in his tax returns. The Income Tax authorities imposed a penalty and interest for the assessment years 1985-86, 1986-87, and 1987-88. The petitioner sought a reduction/waiver of the penalty and interest under Section 273-A of the Income Tax Act, 1961, but the application was dismissed for not securing the interest of the revenue. The court found the dismissal to be non-speaking and without proper consideration of the conditions under Section 273-A, leading to the decision to remit the matter for a fresh evaluation.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 693713 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 05-08-2013
• Assessment Year: misc
• Other Referred Cases: P.A. Mohammed Abdul Thader & Co. Vs. C.I.T. (1978)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: VIVEK SETHI
• Assessee Lawyers: ALOK MITTAL
• Keywords: Bank guarantee; Compulsory Acquisition; Income Tax; Interest; Penalty; Waiver
• Section: 273-A

Judgement Text

"C.W.P. No.18629 of 1991 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.W.P. No.18629 of 1991. Date of Decision:-05.08.2013. Ramji Dass .........Petitioner. Versus Commissioner of Income Tax, Central Revenue Building, Jalandhar and another .........Respondents. CORAM: Hon'ble Mr. Justice Rajive Bhalla Hon'ble Mr. Justice Dr. Bharat Bhushan Parsoon. ***** Present:- Mr. Alok Mittal, Advocate for the petitioner. Mr. Vivek Sethi, Advocate for the respondents. Rajive Bhalla, J (Oral) By this order, we shall dispose of CWP No.18629 of 1991 and CWP No.18630 of 1991. The facts are being taken from CWP No.18629 of 1991. The question of law that arises for adjudication is the scope and ambit of Section 273-A of the Income Tax Act, 1961 (for short, referred to as 'the 1961 Act'). The petitioner was paid compensation for compulsory Yag Dutt 2013.09.02 12:16 I attest to the accuracy and integrity of this document C.W.P. No.18629 of 1991 -2- acquisition of his land, under the Defence of India Act, 1971. The petitioner voluntarily filed a return of income disclosing receipt of compensation. The income tax authorities imposed a penalty and levied interest for assessment years 1985-86, 1986-87 and 1987-88. The petitioner did not file any appeal but filed an application under Section 273-A of the 1961 Act for reduction/waiver of penalty and interest. However, during pendency of the application, proceedings of imposition of penalty were dropped. The Commissioner of Income Tax, Jalandhar called upon the petitioner to furnish a bond or a bank guarantee to secure the interest of the revenue. The application was thereafter dismissed for failure to secure the interest of the revenue. A relevant extract from the impugned order reads as follows: “ 4. As the assessee has neither paid nor made any satisfactory arrangement of payment of taxes, petition of the assessee cannot be accepted as all the conditions for application of provisions of Section 273A are not satisfied. Reliance is placed in the case of “P.A. Mohammed Abdul Thader & Co. Vs. C.I.T. (1978)” reported in 112 ITR 552 (Ker.)...... “The assessee made an application under Section 220(3) to the income-tax officer for extension of time for payment of tax etc. It was held that neither the making of such an application nor an order passed under Section 220(3) granting extension can amount to the making of satisfactory arrangement for payment of tax, etc.”..... 5. Since all the conditions as laid down u/s 273A are not satisfied, the petition of the assessee for the assessment years 1979-80 to 1987-88 is hereby rejected.” Yag Dutt 2013.09.02 12:16 I attest to the accuracy and integrity of this document C.W.P. No.18629 of 1991 -3- Counsel for the petitioner submits that apart from the fact that the petitioner was not afforded an opportunity of hearing, the impugned order is liable to be set aside on account of an illegal exercise of jurisdiction. The petitioner's application for reduction or waiver of interest has not been considered or decided but has been dismissed for failure to secure the interest of the revenue. The petitioner has furnished a bank guarantee of the amount involved in compliance with interim order dated 14.11.1991 passed during pendency of the writ petition. The matter may, therefore, be remitted to the Commissioner of Income Tax for considering the matter afresh and in accordance with factors set out in Section 273-A of the 1961 Act. Counsel for the revenue submits that the petitioner did not come forward to secure the interest of the revenue and despite grant of adequate opportunity, failed to appear before the Commissioner. The petitioner's submission that he was not afforded an opportunity of hearing is, therefore, factually incorrect. It is further submitted that the impugned order does not suffer from an error of jurisdiction as the Commissioner was conscious of the provisions of Section 273-A of the 1961 Act and, therefore, called upon the petitioner to secure the interest of revenue but as the petitioner did not come forward to furnish a bond or a bank guarantee, the Commissioner was justified in dismissing the application. We have heard counsel for the parties and have gone through the impugned order. A perusal of the impugned order reveals that the application was dismissed for failure to secure the interest of the revenue and as the petitioner does not fulfil the conditions laid down in Section Yag Dutt 2013.09.02 12:16 I attest to the accuracy and integrity of this document C.W.P. No.18629 of 1991 -4- 273-A of the 1961 Act, but without pointing out the conditions the petitioner does not fulfil. The impugned order is, therefore, non-speaking. However, as the petitioner has during pendency of the writ petition furnished a bank guarantee, it would be appropriate and in the interest of justice that the Commissioner of Income Tax is directed to consider the matter afresh and in accordance with parameters set out in Section 273-A of the 1961 Act. In view of what has been stated hereinabove, the writ petition is allowed, the impugned order is set aside and the matter is remitted to the Commissioner of Income Tax, Bhatinda for considering the matter afresh within a period of three months from parties putting in appearance before him on 10.9.2013. (Rajive Bhalla) Judge (Dr. Bharat Bhushan Parsoon) Judge August 05, 2013 'Yag Dutt' Yag Dutt 2013.09.02 12:16 I attest to the accuracy and integrity of this document "