Jaswant Singh vs Commissioner of Income Tax

D.V. Sehgal, J.—The petitioner has sought a writ of certiorari quashing the order dated March 31, 1979, passed by the Commissioner of Income Tax, Jalandhar, the respondent, through the present writ petition.

The facts, in brief, are that the petitioner moved an application for waiver of penalty u/s 273A of the Income Tax Act, 1961 (hereinafter called "the Act"), and the interest charged under Sections 139(8) and 217 of the Act from him for the assessment year 1972-73 by invoking the powers of the respondent u/s 273A of the Act. He claimed that all the conditions laid down in Section 273A were satisfied as he had filed the Income Tax return without the issuance of a notice to him u/s 139(2) of the Act voluntarily and in good faith. He claimed that he had paid all the taxes and had co-operated with the Department. The respondent rejected his application by noticing the fact that he was being assessed to tax under the Act since long and he knew the taxability of his income. A notice u/s 210 of the Act for payment of advance tax in respect of the assessment year 1972-73 had been issued to him by the Income Tax Officer and he had even paid the advance tax in response to the said notice. He had been deriving taxable income for the past many years and was accordingly taxed. The respondent thus concluded that his claim that the return of income for the assessment year 1972-73 was filed voluntarily, even though it had been filed without the issuance of a notice u/s 139(2) of the Act, cannot be accepted. It was observed that the condition for being entitled to the benefit u/s 273A of the Act, the return should have been filed not only without the issuance of a notice u/s 139(2) but also voluntarily stands in his way. It was concluded that his argument that all the returns were filed voluntarily without the issuance of a notice u/s 139(2) of the Act could not be accepted, as according to the respondent, such an interpretation would render the word "voluntarily" in Section 273A of the Act redundant. Thus, holding that the return of income was not filed voluntarily by him even though it was filed before the issuance of a notice u/s 139(2) of the Act, his application u/s 273A was dismissed.

After hearing the learned counsel for the parties, I am of the view that the penalty imposable on an assessee can be waived by the Commissioner of Income Tax u/s 273A of the Act if he is satisfied that such a person has in a case referred to in Clause (i) has voluntarily and in good faith made a full disclosure of his income prior to the issuance of a notice to him u/s 139(2) and that he co-operates in an enquiry relating to the assessment of such income and has either paid or made satisfactory arrangement for the payment of tax or interest payable in consequence of an order passed under the Act in respect of the relevant assessment year. It is nowhere provided that if the person concerned is an assessee in the previous years and has been submitting returns, he is not entitled to the benefit of Section 273A. Had that been the intention of the Legislature, it would have specifically so provided in the Act. The provisions of a taxing statute have to be construed strictly. If the person making an application u/s 273A of the Act fulfils the requirements thereof, the Commissioner of Income Tax has to decide the question of waiving the imposition of penalty on merits in each case. I find support for this view from the judgment of R.N. Mittal J. in Dr. Paramjit Singh Grewal Vs. Commissioner of Income Tax and Another, .

The respondent, in view of the above position of law, has rejected the application of the petitioner u/s 273A of the Act, vide his order annexure P-4, on considerations which were not at all relevant for its adjudication. The order, annexure P-4, cannot, therefore, be sustained.

Consequently, I allow this petition, quash the order, annexure P-4, and direct the respondent to consider the application of the petitioner u/s 273A of the Act afresh after taking into consideration the relevant conditions as provided therein. There shall be no order as to costs.