High Court Of Himachal Pradesh
H.P. State Forest Corporation Ltd. vs. CIT & ANR.
Sections 260A, 273(2)(a), 273(2)(aa)
Asst. Year 1987-88
V.K. Gupta, C.J. & Arun Kumar Goel, J.
IT Appeal No. 6 of 2003
2nd April, 2003
Counsel Appeared
M.M. Khanna with Rakesh Sharma, for the Appellant : None, for the Respondents
JUDGMENT
V. K. GUPTA, C.J. :
Learned counsel for the appellant has drawn our attention to p. 6 of the memo of appeal filed under s. 260A of the IT Act, 1961, wherein at para 8, the following three substantial questions of law have been formulated by the appellant. We quote :
“(a) Whether the notice issued for imposition of penalty under s. 273(2)(a) of the IT Act, 1961, authorised the AO to impose the penalty under any other section, i.e., s. 273(2)(aa) of the Act ?
(b) Whether penalty can be imposed under s. 273(2)(aa) of the IT Act, 1961, without the issue of show-cause notice for the same ?
(c) Whether the Hon’ble Tribunal was justified in coming to the conclusion that the mention of s. 273(2)(a) in place of section, i.e., 273(2)(aa) of the IT Act was not material at all as the assessee was given reasonable opportunity of being heard before imposition of penalty and further holding that the assessee would not have furnished a different reply had the notice been issued under s. 273(2)(aa) of the Act ?”
2. We have been taken through the judgment of the Tribunal passed on 31st Oct., 2002, and find that the dispute which has given rise to the formulation of the aforesaid so called substantial questions of law (as per appellant) relates to the issuance of an allegedly wrong notice. The notice in question dt. 27th June, 1994, was issued to the appellant by the Dy. CIT, Solan, extract whereof reads thus : “To, H.P. State Forest Corpn. New Himrus Building, Shimla. Sub : Penalty proceedings under ss. 271(1)(c) and 273(2)(a). Asst. yr. 1987-88. The above penalty proceedings are pending in your case. You are hereby given an opportunity to attend my office to show cause why penalty for the abovesaid default should not be levied upon you. You may also file written reply on or before 8th Aug., 1994 (sic) along with documentary evidence. In case, you have filed an appeal, you may furnish the documentary evidence in proof of the same by the abovesaid date positively. (Sd.) Dy. CIT, Solan.” The appellant filed reply to the aforesaid show-cause notice. It is not the case of the appellant that the appellant was denied any opportunity of hearing. The appellant’s case is that the notice is defective inasmuch as it was issued in terms of cl. (a) of sub-s. (2) of s. 273 of the IT Act but actually the appellant was covered by sub-s. (4) of s. 209A of the IT Act, the notice should instead have been issued under cl. (aa) of sub-s. (2) of s. 273 and, therefore, this being a defective notice, the proceedings initiated on its basis were void ab initio and hence, the penalty order passed against the appellant was illegal. The issuance of wrong notice in the aforesaid manner, therefore, according to the appellant, has given rise to the formulation of the aforesaid three substantial questions of law.
The Tribunal has very elaborately and succinctly dealt with the aforesaid issue. We reproduce the following part of the Tribunal’s judgment, for appreciating the manner in which the Tribunal has dealt with so called defect in the notice. We quote : “We have gone through the case law cited on behalf of the assessee but are of the view that none of the authorities cited at the Bar can help the assessee in this case. The notice served on the assessee was correct and was in accordance with law. The penalty proceedings, therefore, in our view, do not suffer from any illegal infirmity. We, therefore, uphold the legality and validity of the order passed in the present case. We have already reproduced cl. (a) and cl. (aa) of sub-s. (2) of s. 273. A comparative study of the above two clauses would show that these clauses relate to levy of penalty for furnishing ‘estimate of advance tax payable by him (assessee) which he knew or had reason to believe to be untrue’. Clause (a), no doubt, is, applicable where estimates under sub-ss. (1), (2), (3) and (5) are filed besides estimates filed under sub-ss. (1) and (2) of s. 211, whereas cl. (aa) is made applicable to estimates filed under s. 209A or to estimates filed under sub-s. (3A) of s. 212. But for purposes of show-cause notice to the assessee what is material to be mentioned is not the sub-section under which estimates was filed, the assessee has to be informed that he has submitted an estimate of advance tax payable by him, which he knew or had reason to believe to be untrue. The assessee having himself filed the estimate of advance tax cannot turn around and say that notice is bad in law as the assessee was not correctly informed of the sub-section under which he had filed the estimate, in the notice issued to him. The sub-section under which the assessee has filed the estimate of income-tax is specifically within the knowledge of the assessee. If he is informed that he filed an estimate of advance tax payable by him which he knew or had reason to believe to be untrue (without mentioning the sub-section under which the estimate filed), the requirements of s. 273(1) are fully satisfied. The assessee in such circumstances cannot complain that reasonable opportunity of being heard was not afforded to the assessee and, therefore, penalty imposed was bad in law. The text and setting of the provisions contained in cl. (a) and cl. (aa) of sub-s. (2) of s. 273 are such that if a notice about the estimate of advance tax payable by the assessee as untrue, has been served on the assessee, the requirements of the above provisions and of s. 274(1) are fully satisfied. Therefore, in the present case, we must hold that mention of s. 273(2)(a) in place of s. 273(2)(aa) of the IT Act was not material at all as the assessee was given reasonable opportunity of being heard before imposition of penalty.”
5. The pith and substance of the controversy has been dealt with by the Tribunal but it shall be advantageous for us to observe what is at the centre of the controversy is that the assessee having himself filed the estimate of advance tax should not be permitted to turn around and to say that the notice is bad in law, because, (as per the assessee) it was not correctly informed of the subsection under which the assessee had filed the estimate of advance tax. Such fact had been specifically within the knowledge of the assessee and once it is informed with respect to filing of incorrect or wrong or false estimate and the initiation of penalty proceedings, it was well within the knowledge that the proceedings were being initiated with respect to the estimate of advance tax filed by it for the asst. yr. 1987-88. Taking a hypertechnical view, one may of course be tempted to (at first impression) consider the aforesaid formulated questions as indeed substantial questions of law but if one takes a very pragmatic view one comes to the conclusion that the form of the notice in the peculiar facts and circumstances of the present case was not at all material and it was not very important whether the notice mentioned that it was being issued under cl. (a) or cl. (aa), inasmuch as after the issuance of the notice the assessee having full knowledge, participated in the proceedings and the ultimate order of imposition of penalty was passed after affording opportunity to the assessee of being heard. Yet, there could be cases and instances where by the form of the notice the assessee’s complaint was that it was being misled, it is not being fully and properly being informed with respect to the nature of the proceedings and, therefore, such a mistake resulted in a miscarriage of justice. This is not the case before us. For the aforesaid reasons, therefore, we find that no substantial question of law is involved for our consideration in this appeal. The appeal is accordingly dismissed in limine.
[Citation : 267 ITR 285]
