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Judgment
J.P. Devadhar, J.—In this petition, challenge is to the order of the Commissioner of Income Tax dated January 28, 1993, passed u/s 273A of the Income Tax Act, 1961 (the "Act" for short). By the said order, the Commissioner of Income Tax has declined to waive interest/penalty levied against the petitioner/assessee under various provisions of the Act.
The assessment year involved herein are assessment year 1979-80 and assessment year 1987-88.
Prior to the assessment year 1975-76, the petitioner was assessed to Income Tax regularly. On August 17, 1975, the petitioner went to America. During the financial years 1977-78 and 1978-79, the petitioner visited India for a couple of months. On June 7, 1979, the petitioner once again went to America and returned to India after about 9� years on January 31, 1989.
On February 24, 1989, the petitioner paid self-assessment tax for the assessment year 1979-80 to the assessment year 1988-89 on the taxable income of Rs. 17,399, Rs. 24,650, Rs. 24,691, Rs. 25,527, Rs. 26,083, Rs. 27,635, Rs. 29,993, Rs. 38,404 and Rs. 46,353 respectively. Accordingly, returns of income were also filed. On February 27, 1989, the assessee filed an application u/s 273A of the Act before the Commissioner of Income Tax seeking waiver of interest and penalty imposable under various provisions of the Act in the aforesaid assessment years.
The Assessing Officer thereupon issue notices u/s 148 of the Act and thereafter completed the assessments by accepting the return filed by the assessee. The Assessing Officer levied interest u/s 139(8), Section 215, Section 217 and after initiating proceedings levied penalty u/s 271(1)(a), 271(1)(b) and 271(1)(c) of the Act.
6 In response to the application for waiver of interest/penalty filed on February 27, 1989, the Commissioner of Income Tax issued notice belatedly on September 30, 1992 and by the impugned order dated January 28, 1993, rejected the said application on the ground that the petitioner has neither paid the interest nor made any satisfactory arrangement for payment of interest. The Commissioner of Income Tax concluded that since there was undue delay in the submission of return of income, there was delay in payment of self-assessment tax and, therefore, not a fit case for exercising jurisdiction u/s 273A of the Act. Challenging the aforesaid order of the Commissioner of Income Tax, the present petition is filed.
On June 8, 1993, this petition was admitted and interim relief was granted in terms of prayer Clause (c) of the petition thereby restraining the respondents from taking any steps or proceedings to implement the order dated January 28, 1993.
To complete narration of facts, we may note that after filing of the petition, the Commissioner of Income Tax (Appeals) by an order dated February 22, 1995, has deleted the penalty levied u/s 271(1)(a) for the assessment year 1980-81 to the assessment year 1988-89. Similarly, by order dated February 22, 1995, the Commissioner of Income Tax (Appeals) has deleted the penalty levied u/s 271(1)(c) of the Act for the assessment year 1980-81 to the assessment year 1985-86.
From the impugned order, it is seen that the waiver application of the petitioner has been rejected only on the ground that the assessee has neither paid the interest nor made any satisfactory arrangement in respect thereof. From the application made by the petitioner, it is seen that during the relevant assessment years the returns of income could not be filed within the stipulated time, because, the petitioner was outside India. Immediately after returning to India, the petitioner had filed returns of income voluntarily for all the years. It is pertinent to note that the income derived by the petitioner comprised mainly interest from FDR and dividend income.
It is not in dispute that the return of income as filed have been accepted in toto without making any additions. In the application for waiver of interest/penalty filed u/s 273A of the Act on February 27, 1989, the assessee had specifically stated that she had kept the amounts in bank as fixed deposit (FDR) and specifically undertook to make arrangement for payment of taxes, if any, remaining payable to the satisfaction of the Commissioner of Income Tax. While disposing of the said application belatedly on January 28, 1993, the Commissioner of Income Tax has not even ascertained as to whether the said FDRs were still available as security. It is contended by the assessee that on June 16, 1993, while filing a return for the assessment year 1992-93, the Assessing Officer was informed that the petitioner had fixed deposits of substantial amount for recovering unpaid interest chargeable under the Act. It is also pertinent to note that the penalty levied u/s 271(1)(a) for the assessment year 1980-81 to the assessment year 1988-89 have been deleted by the Commissioner of Income Tax (Appeals) and the same is accepted by the Revenue. Similarly, penalty levied u/s 271(1)(c) of the Act has also been deleted by the Commissioner of Income Tax (Appeals) for the assessment year 1980-81 to the assessment year 1985-86.
In these circumstances, we are of the opinion that the Commissioner of Income Tax was not justified in rejecting the application for waiver of interest/penalty on the ground that the assessee had not made satisfactory arrangements for payment of tax.
Accordingly, the petition succeeds. The impugned order dated January 28, 1993, is quashed and set aside and it is held that the assessee is entitled to waiver of interest/penalty as claimed in the application dated February 27, 1989.
During the pendency of the writ petition, the recovery of interest/penalty was stayed by this Court. However, it is claimed that even after the stay granted by this Court on June 8, 1993, the petitioner on March 16, 1996, has paid the interest levied under Sections 139(8) and 215 of the Act for the assessment years 1980-81 to 1988-89. Since the Revenue could not appropriate the said amount on account of the stay granted by this Court, the petitioner would be entitled to refund of the said amount without any interest.
Rule is made absolute in terms of this order with no order as to costs.