High Court Of Allahabad
Kailash Mills vs. CIT
Section 139(8), 273A(1)(c)
M. Katju & Yatindra Singh, JJ.
Civil Misc. Writ Petn. No. 909 of 1984
11th December, 2002
Counsel Appeared
R.K. Gulati, R.S. Agarwal and Vikram Gulati, for the Petitioner : Prakash Krishna and Bharatji Agrawal, for the Respondent
JUDGMENT
BY THE COURT :
Heard Shri Vikram Gulati, learned counsel for the petitioner, and Sri Prakash Krishna for the Department. The petitioner has challenged the impugned order of the CIT under s. 273A of the IT Act, 1961, dt. 19th July, 1984, annexure 2 to the petition. In this petition we are only concerned with the claim of waiver of interest under s. 139(8) which has been denied by the CIT.
The CIT has stated in his order that the ITO has stated in his report that the disclosure by the assessee was voluntary prior to the issue of any notice and it was done in good faith. The assessee also cooperated during the assessment proceedings.
It is well settled that if the conditions in cl. (c) of s. 273A(1) of the IT Act are fulfilled, the CIT must give some relief to the petitioner, though he has discretion in granting either total waiver or partial waiver depending on the facts of the case, but he cannot reject the application under s. 273A in toto when the conditions mentioned under s. 273A(1)(c) are fulfilled vide Jaswant Rai vs. CBDT (1998) 147 CTR (SC) 110 : (1998) 231 ITR 745 (SC). In this case it has been observed by the Supreme Court that in deciding the application under s. 273A, the CIT has to take into consideration the conditions mentioned in that provision, but he cannot take into account factors or reasons which are extraneous to those conditions specified in the provision. In the present case the reasons given for rejecting the petitioner’s application for waiver of interest under s. 139(8) are not those mentioned in cl. (c) of s. 273A(1).
Learned counsel for the Department has relied on the decision of the Supreme Court in Smt. Harbans Kaur vs. CWT (1997) 138 CTR (SC) 211 : (1997) 224 ITR 418 (SC). In that decision it was held that the CIT has discretion in granting relief under s. 273A. In our opinion, on a reading of both the above decisions together the legal position which emerges is that if the conditions mentioned in cl. (c) of s. 273A(1) are satisfied some relief has to be given to the assessee, though that relief may either be total waiver of interest or reduction of interest depending upon the facts of the case. However, the CIT cannot totally reject the waiver application if the conditions mentioned in cl. (c) of s. 273A(1) are satisfied.
For, the reasons given above this writ petition is allowed, the impugned order dt. 19th July, 1984, to the extent that it rejected the petitioner’s application for waiver of interest under s. 139 (8) is set aside, and the matter is remanded to the CIT to pass a fresh order in the light of the observations made above.
[Citation : 260 ITR 322]
