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High Court Of Allahabad
Satish Chandra, K.C. Agrawal, JJ.
Mool Chand Mahesh Chand : Appellant
Versus
Commissioner Of Income-Tax And Anr. : Respondent
Civil Miscellaneous Writ 325 (Tax) of 1977
Decided On : Mar 15, 1978
INCOME TAX - Waiver of penalty - Section 273A - Commissioner's discretion - Oral hearing - Natural justice - Speaking order - Detection of concealment - Voluntary filing of returns.
Fact of the Case:
The petitioner, a Hindu undivided family, filed revised returns for assessment years 1969-70 and 1970-71, as well as returns for years 1963-64 to 1971-72, after the Income-tax Officer initiated an inquiry into the concealment of income. The petitioner applied for waiver of penalty under Section 273A(1)(ii)(b) of the Income-tax Act, 1961, but the Commissioner of Income-tax rejected the application, holding that the returns were not filed voluntarily and that the case was detected by the department prior to disclosure.
Finding of the Court:
The court held that the Commissioner's order was valid and that the petitioner was not entitled to a waiver of penalty. It found that the returns were not filed voluntarily, as the petitioner had only filed them after the Income-tax Officer had initiated an inquiry into the concealment of income. The court also found that the case was detected by the department prior to disclosure, as the Income-tax Officer had started an investigation into the concealment of income before the petitioner filed the revised returns.
Issues: 1. Whether the Commissioner of Income-tax was required to give an oral hearing to the petitioner before rejecting the application for waiver of penalty under Section 273A of the Income-tax Act, 1961? 2. Whether the Commissioner's order was a speaking order? 3. Whether the returns were filed voluntarily by the petitioner? 4. Whether the case was detected by the department prior to disclosure?
Ratio Decidendi: 1. The court held that the Commissioner of Income-tax was not required to give an oral hearing to the petitioner before rejecting the application for waiver of penalty under Section 273A of the Income-tax Act, 1961, as there is no provision in the Act requiring such a hearing. The court also held that the principles of natural justice do not require an oral hearing in every case, and that a hearing on paper may be sufficient in a suitable case. 2. The court held that the Commissioner's order was a speaking order, as it contained reasons for the decision. The court found that the Commissioner had considered the facts of the case and had given reasons for rejecting the application. 3. The court held that the returns were not filed voluntarily by the petitioner, as the petitioner had only filed them after the Income-tax Officer had initiated an inquiry into the concealment of income. 4. The court held that the case was detected by the department prior to disclosure, as the Income-tax Officer had started an investigation into the concealment of income before the petitioner filed the revised returns.
Final Decision: The court dismissed the writ petition with costs.
K.C. Agrawal, J.
1. THIS is a petition under Article 226 of the Constitution for a writ of certiorari quashing the order of the Commissioner of Income-tax dated 18th May, 1977, rejecting the application filed by the petitioner under Section 273A(i)(ii)(b) of the Income-tax Act, 1961 (hereinafter referred to as "the Act").
2. THE petitioner is a Hindu undivided family carrying on business in sarafa and money-lending. It was assessed to income-tax for the assessment year 1964-65. It, however, did not file returns in respect of the assessment years 1965-66 to 1968-69. For the assessment years 1969-70 and 1970-71 returns were filed on 25th March, 1970, and 6th March, 1971, respectively. It appears that while dealing with the case of the year 1969-70, the Income-tax Officer concerned considered it necessary to verify the correctness and completeness of the returns filed by the petitioner. Hence, a notice was issued on February 8, 1971, under Section 143(2) of the Act requiring the presence of the petitioner. THE petitioner's representative appeared on September 22, 1971, before the Income-tax Officer. On the aforesaid date the Income-tax Officer required the petitioner to file further details in respect of matters which are mentioned below :
(1) Details of capital account from 1963-64 to date with details of all investments year-wise, and particulars of personal expenses, including marriages, deaths and illness in the family in those years;
(2) Detailed family tree with age, educational qualifications, etc., of each living or deceased coparcener during these years ;
(3) Detailed copies of profit and loss account, balance-sheet and personal account for all the years ;
(4) Valuation certificates of the bagh including plantation and irrigation facilities installed and house and shops from an approved valuer;
(5) Details of all bank or post office accounts or deposits and shares, etc., held in the name of any of the coparceners.
(6) Details of all furniture, fittings and assets of domestic nature, viz., sofa, wardrobes jewellery, etc., acquired during these years with cost and date of acquisition.
(7) Copies of all bank accounts from date of inception to date and details of lockers held, if any.
After the aforesaid date, the petitioner took several adjournments. On 24th March, 1972, he filed revised returns for the assessment years 1969-70 and 1970-71 as well as returns for the years 1963-64 to 1971-72. As the petitioner had concealed the income with reference to the years 1963-64 to 1970-71, he filed an application for the waiver of penalty before the Income-tax Officer. It, however, appears that on being subsequently advised that the application for waiver of penalty had to be moved to the Commissioner of Income-tax, the petitioner filed another application for the waiver. This application was addressed to the Commissioner of Income-tax through the Income-tax Officer, Fatehgarh. Along with the application for waiver the petitioner had also filed an application for disclosure requesting that the income disclosed by him be permitted to be spread over the years 1963-64 to 1971-72. This application was subsequently revised by the petitioner and the disclosure application for spreading over the entire income was restricted to the years 1965-66 to 1971-72. The final position with reference to the various years along with the particulars of the revised returns as well as the initial returns would appear from the chart given below:
Assessment year Date of filing the returns Income returned Revised return filed
First time Second time
Rs.
1963-64 24-3-72 16,500
1964-65 25-3-67 1,508
1965-66 24-3-72 18,600 14,200/ 1-3-
75
1966-67 24-3-72 19,650 14,850/ 1-3-
75
1967-68 24-3-72 20,900 16,200/ 1-3-
75
1968-69 24-3-72 22,440 28,150/ 1-3-
75
1969-70 25-3-70 8,096 26,490/24-3- 48,600/5-5-
72 75
1970-71 6-3-71 7,191 26,090/24-3- 37,600/5-5-
72 75
1971-72 24-3-72 25,540 26,550/ 5-5-
75
3.
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