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2001 Supreme(Cal) 711
High Court Of Calcutta
PINAKI CHANDRA GHOSH
SATISH KAPOOR - Appellant
Versus
COMMISSIONER OF INCOME-TAX - Respondent
W. P. 428 Of 1997
Decided On : 11/28/2001
The requirement of obtaining previous approval of the Chief Commissioner under Section 273a(1) is necessary when the disclosed income exceeds Rs. 5 lakhs, and no permission and/or approval is required by the Commissioner to deal with the matter.
Headnote:
INCOME TAX - WAIVER OF PENALTY - SECTION 271(1)(C)(III) - SECTION 273A - REQUIREMENT OF PREVIOUS APPROVAL OF CHIEF COMMISSIONER - INTERPRETATION - CONDITIONS FOR WAIVER OF PENALTY - POWER OF COMMISSIONER TO WAIVE PENALTY - APPEALABILITY OF ORDER - WRIT APPLICATION - MAINTAINABILITY.
Fact of the Case:
The petitioner, as the legal heir of the deceased assessee, filed returns for the assessment years 1984-85 and 1987-88 to 1990-91, disclosing undisclosed investments and income. The petitioner also filed returns for the assessment years 1983-84, 1985-86, and 1986-87 and paid taxes. The petitioner applied for waiver of penalty under Section 271(1)(c)(iii) for the assessment years 1984-85 and 1987-88 to 1990-91. The Commissioner of Income-tax rejected the application, and the Chief Commissioner upheld the rejection. The petitioner filed a writ petition challenging the orders.
Finding of the Court:
The court held that the petitioner had a right to prefer an appeal from the order passed by the authorities and that the order was appealable. The court further held that no grounds had been made out for the petitioner that the said authorities had passed such order without any jurisdiction. Accordingly, the court held that the petitioner had no right to file the writ application and dismissed the application.
Issues: 1. Whether the Commissioner of Income-tax had the power to waive the penalty under Section 271(1)(c)(iii) without the previous approval of the Chief Commissioner? 2. Whether the order passed by the Commissioner of Income-tax was appealable? 3. Whether the writ application was maintainable?
Ratio Decidendi: 1. The court held that the requirement of obtaining previous approval of the Chief Commissioner under Section 273a(1) is necessary when the disclosed income exceeds Rs. 5 lakhs and that no permission and/or approval was required by the Commissioner to deal with the matter. 2. The court held that the order passed by the Commissioner of Income-tax was appealable under Section 246(1)(ii) of the Income-tax Act, 1961. 3. The court held that the writ application was not maintainable since the petitioner had a right to prefer an appeal from the order passed by the authorities.
Final Decision: The court dismissed the writ application.
( 1 ) THIS is an application filed by the petitioner challenging the orders dated February 20, 1996, and July 30, 1996, passed by respondents Nos. 1 and 2 refusing to waive the penalty under Section 271 (1) (c) (iii) of the Income-tax Act, 1961 (hereinafter referred to as "the said Act"), for the assessment years 1984-85 and 1987-88 to 1990-91.
( 2 ) THE facts of the case briefly are as follows :
( 3 ) ONE Bishnu Narain Kapur, died intestate on March 22, 1991, leaving behind the writ petitioner as one of his legal heirs. After the death of the said asses-see, the petitioner was able to find out that some of the investments made by the assessee in different years and the income derived from such investments had not been disclosed by him in his returns. The writ petitioner voluntarily filed the returns for the assessment years 1984-85 and 1987-88 to 1990-91 and further requested the Income-tax officer (hereinafter referred to as "the ITO") to reopen the assessments for the said assessments years under Section 147/ 148 of the said Act.
( 4 ) THE writ petitioner further informed the Income-tax Officer that the said deceased also failed to disclose some amounts for the assessment years 1983-84, 1985-86 and 1986-87 and filed the returns for the said assessment years and duly paid tax aggregating to a sum of Rs. 38,832 for the said assessment years.
( 5 ) THEREAFTER, the petitioner made an application before respondent No. 1 for the assessment year 1984-85, 1987-88 to 1990-91 and prayed for waiver of penalty leviable under Section 271 (1) (c) (iii ).
( 6 ) ON February 20, 1996, the Commissioner of Income-tax disposed of the said application. The writ petitioner filed an application before the Commissioner of Income-tax on April 23, 1996, for rectification of the said order dated February 20, 1996, on the ground that all the conditions under Section 273a (1), were satisfied and the said matter was referred by the Commissioner before the Chief Commissioner of Income-tax. The Chief Commissioner specifically stated that no interference is required and accordingly on July 30, 1996, the Commissioner duly rejected the application for rectification.
( 7 ) LEARNED counsel appearing on behalf of the petitioner contended that under Section 273a two separate powers have been given by the Legislature under Sections 273a (1) and 273a (4 ). He further contended that for the exercise of the powers under Sub-section (1), the requirement of obtaining previous approval of the Chief Commissioner is necessary when the disclosed income exceeds Rs. 5 lakhs and the requirement of previous approval is also necessary before passing of an order under Sub-section (4) of Section 273a where the amount of penalty exceeds Rs. 1 lakh. Therefore, according to him no permission and/or approval was required by the Commissioner to deal with the matter and accordingly he submitted that the Commissioner could not have sent the matter before the Chief Commissioner for his approval. Therefore, he contended that the act on the part of the said authorities is wholly and fully a misconstruction of the said sections and they did not apply their minds properly. He further contended that it is not necessary for the assessee to show under Section 273a (1) that there is genuine hardship in order to obtain waiver of the penalty under Section 271 (1) (c) (iii) and he further contended that the conditions fulfilled by the writ petitioner to get such benefit. He further contended that the Commissioner has sent the matter before the Chief Commissioner for waiving penalty. Therefore, according to him, such reference has been made by the Commissioner to the Chief Commissioner after he satisfied himself that the petitioner is entitled to get such benefit. He relied upon the judgments reported in Mool Chand Mahesh Chand v. CIT ; K. Ramulu and Brothers v. CIT ; Jaswant Rai v. CBDT and Revenue and Laxman v. CIT [1988] 174 ITR 465 (Bom) and contended that the cou
