High Court Of Calcutta
Satish Kapur vs. CIT
Sections Art. 226, 154, 246(1)(c), 253(1)(c), 271(1)(c), 273A
Asst. Year 1984-85, 1987-88, 1989-90, 1990-91
Aloke Chakrabarti & S.K. Gupta, JJ.
GA No. 275 of 2002 & APOT No. 44 of 2002
24th November, 2003
Counsel Appeared
J.P. Khaitan, for the Petitioner : Biswanath Samaddar, for the Respondent
JUDGMENT
Aloke Chakrabarti, J. :
This is an appeal filed against the judgment and order passed on 28th Nov., 2001, by the learned Single Judge deciding the Writ Petition No. 428 of 1997 Satish Kapur vs. CIT & Ors. [reported at (2002) 175 CTR (Cal) 12— Ed.].
2. Facts relevant for the present purpose in brief are that late Bisnu Narayan Kapur was regularly assessed under the IT Act. After his death as a bachelor on 22nd March, 1992, leaving behind him the writ petitioner as one of his legal heirs, it was detected that some of the investments of the deceased assessee had not been disclosed by him in his return and, therefore, the petitioner voluntarily filed returns for the concerned asst. yrs. 1984-85 and 1987-88 to 1990-91 making complete and true disclosure of the income of the deceased assessee and also paid tax on the said income. On the application filed by the writ petitioner for reassessing the income, in course of the assessment proceeding, petitioner was informed that some small amount of income for the asst. yrs. 1983-84, 1985-86 and 1986-87 had not been disclosed and petitioner was asked to file returns for the said assessment years also and to pay the taxes. On 20th Aug., 2001, petitioner made an application in respect of asst. yrs. 1984-85 and 1987-88 to 1990-91 for waiver of penalty leviable under s. 271(1)(c)(iii) and interest payable under the said Act. The said application was filed under sub-s. (1) of s. 273A of the Act.
On satisfaction of the CIT about the fulfilment of all the stipulated condition, approval of the Chief CIT was sought for waiver of the penalty since the amount as disclosed exceeded Rs. 5 lakhs. The Chief CIT took the view that sub-s. (4) of s. 273A overrides all other provisions of s. 273A and as one of the requirements under said sub-s. (4) namely, genuine hardship would be caused to assessee in case of non-waiver, was not satisfied, and, therefore, the approval could not be granted. Accordingly, on 20th Feb., 1996, the CIT rejected the prayer for waiver of penalty though the interest charged under s. 217 for the asst. yrs. 1984-85, 1986-87 and 1988-89, was waived.
On 23rd April, 1996, petitioner filed an application before the CIT for rectification of the said order dt. 20th Feb., 1996 on the ground that the requirements contained in sub-s. (4) of s. 273A were extraneous as the application filed by the petitioner was one under sub-s. (1) and not under sub-s. (4). After the matter was referred to the Chief CIT who refused to interfere, the CIT rejected the application for rectification by his order dt. 30th July, 1996.
Challenging the said two orders, the writ application was filed which was decided by the judgment impugned in the present appeal.
Mr. J.P. Khaitan, learned counsel for the appellant advanced two contentions. First contention of the appellant is that writ petition was dismissed holding that order was appealable and, therefore, for not availing alternative remedy available, no interference was made. It is stated by the learned counsel for appellant that in fact against the impugned order no appeal lies and he referred to s. 253 and 246 of the IT Act. It is stated that the impugned order was passed under s. 273A by the CIT. Appeals are available before the Tribunal in cases mentioned in s. 253 but order under s. 273A is not appealable thereunder. It is further stated that s. 246 as relied on by the learned Judge in the Court below is not applicable in the present case. It is stated that, therefore, orders impugned being not appealable, the writ petition ought to have been entertained. Second contention of the learned counsel for appellant is that provisions of sub-s. (4) of s. 273A do not override sub-s. (1) thereof and it was in addition to sub- s. (1). Therefore, the application filed by the petitioner under sub-s. (1) of s. 273A, could not be rejected on the ground of not satisfying any condition mentioned in sub-s. (4) of the said section.
Learned counsel referred to the judgments in the case of Apex Finance & Leasing Ltd. vs. CIT (1994) 207 ITR 781 (SC), Jaswant Rai & Anr. vs. CBDT & Ors. (1998) 147 CTR (SC) 110 : (1998) 231 ITR 745 (SC), Patel Engineering Co. Ltd. vs. C.B. Rathi & Anr. (1985) 44 CTR (Guj) 458 : (1985) 151 ITR 542 (Guj), Laxman vs. CIT (1989) 75 CTR (Bom) 76 : (1988) 174 ITR 465 (Bom) and Guru Nanak Estates & Anr. vs. CIT & Ors. (1994) 120 CTR (Cal) 356 : (1994) 208 ITR 118 (Cal).
Mr. Samaddar, learned counsel for the Revenue, contended that as the petitioner filed rectification application under s. 154, the order sought to be rectified merged in the order passed under s. 154 and such order passed by the CIT passed under s. 154 is appealable under s. 246 of the Act and in this connection reference was made to sub-s. (c) thereof. It is stated that in such circumstances, remedy of appeal being available under s. 246, writ petition was rightly refused to be entertained. Second contention of the respondent is that prayer for rectification was rightly refused as necessary grounds for rectification were not available to the petitioner and in such circumstances, the original order having been merged in the rectification order, the contention with regard to scope of sub-ss. (1) and (4) of s. 273A can no more be urged by the petitioner.
After considering the aforesaid contentions of the respective parties and perusing the materials on record and also provisions of law relied on by the parties, I find authorities under the Act have been mentioned in s. 116 of the Act and in cl. (c) thereof mention was made of “Director of Income-tax or CIT or CIT(A)”. Further, in s. 2(7A) the AO has been defined and a perusal of the said provision shows that CIT is not an AO.
It appears that under cl. (c) of sub-s. (1) of s. 246 an order under s. 154 is appealable. But the opening sentence of sub-s. (1) of s. 246 provides that the appeal is available against the order of an AO (other than the Dy. CIT) only and in the present case the order having been passed by the CIT who is not an AO, no provisions of appeal under s. 246 is available. Similarly, s. 253 which provides for appeals to the Tribunal shows that any assessee may appeal to the Tribunal against an order passed by a Dy. CIT(A) before the first day of October, 1998 or as the case may be, a CIT(A) under various sections. Clause (c) of sub-s. (1) of s. 253 shows that such appeal can be filed against an order passed by the CIT under specified sections which do not include s. 273A. Therefore, it is apparent that neither the order under s. 273A nor the order under s. 154 passed by the CIT is appealable either under s. 246 or under s. 253. Therefore, it appears that the writ petition could not be refused to be entertained on the ground of not availing any alternative statutory remedy.
10. With regard to scope of sub-s. (1) and sub-s. (4) of s. 273A, it appears that the opening words of sub-s. (4) “without prejudice to the powers conferred on him by any other provision of this Act…..” make it clear that said sub-section was not a provision overriding the provision of sub-s. (1) and is clearly a provision in addition to sub- s. (1). The application filed by the petitioner admittedly is one filed under sub-s. (1) of the said section. Therefore, when conditions required for exercising power under sub-s. (1) are satisfied, the authority ought to have exercised the power as decided in the case of Laxman (supra) and Apex Finance & Leasing Ltd. (supra).
11. The fact that the conditions mentioned in sub-s. (4) of s. 273A have not been satisfied is not a relevant factor in these circumstances for refusing exercise of power under sub-s. (1). Moreover, the fact that the CIT asked for approval of Board shows that he also was satisfied that preconditions had been fulfilled in the case. In view of the aforesaid circumstances, it appears that the concerned authority has failed to exercise jurisdiction vested in it and the finding in the impugned judgment that the order was not without jurisdiction, cannot stand.
12. In view of the aforesaid finding, the penalty charged is also waived and the waiver petition is allowed. The judgment and order dt. 30th July, 1996 is modified to the aforesaid extent. Therefore, as question of rectification of the order no more arises the said application is dismissed and the order passed thereon is quashed. The writ petition and the appeal are allowed.
S.K. Gupta, J. :
I Agree.
[Citation : 265 ITR 673]
