Madhya Pradesh H.C : The petitioner, a registered firm, filed its return of income for the asst. yr. 1973-74 on August 7, 1975.

High Court Of Madhya Pradesh

M.P. Agricultural Corporation vs. CIT

Section 273A

Asst. Year 1973-74

N.D. Ojha, C.J. & K.K. Adhikari, J.

Misc. Petn. No. 1627 of 1982

14th October, 1987

Counsel Appeared

H.S. Srivastava, for the Assessee : B.K. Rawat, for the Revenue

N.D. OJHA, C.J.:

The petitioner, a registered firm, filed its return of income for the asst. yr. 1973-74 on August 7, 1975. The return for this assessment year was in the normal course to be filed by June 30, 1973, but in view of a general extension having been granted in that year, it could have been filed by August 15, 1973. Accordingly, a delay of nearly two years had occurred in filing the return. According to the petitioner, on the basis of the return filed by it, Rs. 31,056 was the tax payable, out of which a sum of Rs. 11,012 had been paid as advance tax and a sum of Rs. 1,634 had been deducted at source. The balance of Rs. 18,410 was deposited by challan on August 30, 1975, by means of a cheque issued on August 19, 1975. The case of the petitioner further is that return for the asst. yr. 1975-76 had also been simultaneously filed. The tax payable according to it for the year 1975-76 as per return was Rs. 22,330 out of which Rs. 16,280 had been deposited as advance tax and Rs. 4,179-27 had been deducted at source. A sum of Rs.

4,540.73 was the balance of tax for the year 1975-76 which was paid on December 8, 1975. Its case further is that even though the sum of Rs. 18,410 was the balance of the tax payable for the year 1973-74 the clerk of the counsel who scribed the challan for deposit of the aforesaid amount, due to inadvertence, mentioned the assessment year as 1975-76 in place of 1973-74. The case of the petitioner is that this inadvertent mistake occurred inasmuch as the returns for the asst. yrs. 197374 and 1975-76 were simultaneously filed on the same day, namely, August 7, 1975, and, for that purpose, the relevant forms including the challans for both the years were filled in by the said clerk simultaneously. According to para. 6 of the writ petition, the assessment year was mentioned as 1975- 76 in the challans for both the years.

The assessment for the year 1973-74 was completed by the ITO by his order dated March 17, 1976. A sum of Rs. 38,650 was charged as interest for late filing of the return under s. 139(8) of the IT Act, 1961 (hereinafter referred to as the Act). On appeal, however, this amount was reduced to Rs. 37,015. Apart from charging interest as aforesaid, penalty was also imposed on the petitioner.

The petitioner made an application under s. 273A of the Act on October 17, 1978, both for waiver of penalty as well as interest. This application was partly allowed on March 5, 1981, whereby the penalty was waived. It was, however, dismissed in so far as waiver/reduction of interest under s. 139(8) of the Act was concerned. A writ petition, being No. 952 of 1981, was filed by the petitioner challenging the aforesaid order dated March 5, 1981, in so far as the application for waiver/reduction of interest was dismissed. This writ petition was allowed on February 28, 1982, and the CIT to whom the aforesaid application had been made was directed to decide the question of waiver/reduction of interest afresh after giving the petitioner an opportunity of personal hearing. The application for waiver/reduction of interest was, however, again dismissed, after hearing the petitioner, by the CIT on August 30, 1982. It is this order of the CIT, a copy whereof has been filed as annexure G to the writ petition, which is sought to be quashed in the present writ petition. The ground on which the application has been dismissed by the CIT is that assessment for the year 1973-74 was completed on March 17, 1976, whereas payment of tax of Rs. 18,410 was made on April 15, 1976. According to him, as per the provisions of cl. (c) of sub-cl. (iii) of s. 273A (1) of the Act, the petitioner had to disclose voluntarily its income and pay tax on the income so disclosed and both the conditions had to be simultaneously fulfilled. Since Rs. 18,410, the amount of tax, was paid by the petitioner on April 15, 1976, i.e., after the assessment was completed on March 17, 1976, the petitioner obviously had not complied with the aforesaid requirement of s. 273A(1)(iii)(c) of the Act.

In this connection, it may be pointed out that the case of the petitioner was that challan for depositing the sum of Rs. 18,410 had been submitted along with the return on August 7, 1975, and the amount was also deposited in pursuance thereof on August 30, 1975, but due to clerical error, the assessment year was mentioned in the challan as 1975-76 in place of 1973-74 for the reason already disclosed above. Its case further was that in spite of the mistake being pointed out to the ITO he did not treat the payment of Rs. 18,410 to be one for the year 1973-74 but treating it as payment for the year 1975-76 as stated in the challan, directed the amount which was in excess of the tax payable for the year 1975-76 to be refunded under s. 141A of the Act. According to the petitioner, when the ITO in his assessment order dated March 17, 1976, refused to take into consideration the deposit of Rs. 18,410 aforesaid as a deposit for the asst. yr. 1973-74, it deposited the said amount over again on April 15, 1976. This explanation of the petitioner obviously did not find favour with the CIT and he treated the subsequent deposit made on April l5, 1976, as aforesaid as the deposit of tax for the year 1973-74. The deposit of this amount on August 30, 1975, was treated to be a deposit for the year 1975-76 in view of that year being mentioned in the challan, even though the balance of the tax of Rs. 4,540.73 payable as per return had separately been deposited by the petitioner in regard to the said asst. yr. 1975-76 and the amount of tax deposited which had become in excess was refunded to the petitioner.

It has been urged by learned counsel for the petitioner that the provisions of s. 273A of the Act were inserted for providing incentive by way of waiver or reduction of interest in case an assessee made voluntary disclosure and deposited tax in accordance with such voluntary disclosure and the CIT committed a manifest error of law in taking a hyper-technical view of the matter. According to him, on the facts of the instant case, it was apparent that the mistake in mentioning 1975-76 as the assessment year in the challan whereby deposit of Rs. 18,410 was made was apparently an inadvertent clerical error and it deserved to be treated as such.

In reply, it has been urged by learned counsel for the Department that s. 273A of the Act was inserted w.e.f. October 1, 1975, by the Taxation Laws (Amendment) Act, 1975, and, consequently, the petitioner was not entitled to either waiver or reduction of the amount of interest levied in regard to the asst. yr. 1973-74, namely, for a period prior to October 1, 1975, w.e.f. which date s. 273A was inserted. In support of this submission, reliance has been placed on Ashok Enterprises vs. CIT (1981) 127 ITR 577 (AP). We find it difficult to agree with this submission. Even in the aforesaid decision, emphasis had been placed on the date on which the penalty was imposed. In the instant case, the order of assessment was passed on March 17, 1976, i.e., after s. 273A had been inserted w.e.f. October 1, 1975. Clause (iii) of s. 273A(1) of the Act contemplates reduction or waiver of the amount of interest ” paid or payable under sub-s. (8) of s. 139. In the instant case, according to learned counsel for the petitioner, since the amount of interest became payable after March 17, 1976, i.e., the date on which the order of assessment was passed, and even if there was any doubt in regard to the date on which this amount became payable in view of the language of sub-s. (8) of s. 139 on which reliance was placed by learned counsel for the Department, since the amount of tax was actually paid after March 17, 1976, the application for waiver/ reduction of interest was maintainable. We find substance in this submission and, in our opinion, the application cannot be held to be not maintainable on the basis of the submission made by learned counsel for the Department. It was then urged by learned counsel for the Department that the CIT, on merits, was right in taking the view that out of the two deposits of Rs. 18,410, the deposit that could be taken into consideration as a deposit for the asst. yr. 1973-74 was the one which had been made on April 15, 1976, and since this deposit had been made after the date of passing of the order of assessment and not simultaneously with the return as was required by s. 140A of the Act, the application for waiver/reduction of interest was not maintainable.

Having heard learned counsel for the parties, we are inclined to agree with the submission made by learned counsel for the petitioner on the facts of the instant case. That a challan was submitted by the petitioner along with the return filed on August 7, 1975, for the asst. yr. 1973-74 for having deposited Rs. 18,410 and that in pursuance of the said challan, the said amount was actually deposited do not appear to have been disbelieved by the CIT. What he has held is that since the amount deposited on August 30, 1975, was considered in the asst. yr. 1975 and the assessee was allowed refund of the excess tax paid and since under the taxing provisions each assessment year was independent by itself, tax paid for one year could have been considered in that year alone. Since the sum of Rs. 18,410, according to the CIT, was deposited on August 30, 1975, vide challan mentioning the assessment year as 1975-76, it was rightly treated by the ITO as payment for that year. In our opinion, learned counsel for the petitioner is right in his submission that a very hyper-technical view of the matter has been taken by the CIT. For purposes of holding whether an application for waiver/reduction of interest under s. 273A(1)(iii)(c) of the Act was maintainable or not, what was important to be taken into consideration was whether the assessee has ” voluntarily and in good faith made a full and true disclosure of his income and has paid the tax on the income so disclosed “. That the petitioner in the instant case had made voluntarily in good faith full and true disclosure of its income admits of no doubt inasmuch as it is on the basis of a finding in its favour in this behalf that the penalty imposed simultaneously on it was waived as already indicated above. The only question which arose for consideration was as to whether the amount of tax on the income so disclosed had been simultaneonsly paid or not. So far as this condition is concerned, in view of the case of the petitioner as indicated above, it is apparent that the challan for the sum of Rs. 18,140 was simultaneously submitted along with the return for the asst. yr. 1973-74 and the said amount was also actually deposited in pursuance of the said challan. The only defect which had occurred was that in place of mentioning 1973-74 as the assessment year, due to inadvertent clerical error, the assessment year was mentioned as 1975-76. The explanation submitted in regard to this inadvertent clerical error was that since the return for the year 1975-76 had also been submitted simultaneously on the same date, namely, August 7, 1975, and all the necessary forms for both the years were filled in simultaneously by the clerk of counsel, he committed the inadvertent error of mentioning 1975-76 as the assessment year not only in the challan meant for the year 1975- 76 but also in the challan for the year 1973-74. When the ITO, however, did not agree with the plea raised on behalf of the petitioner in this behalf and passed the order of assessment on March 17, 1976, treating the deposit of Rs. 18,410 made on August 30, 1975, as a deposit not for the asst. yr. 1973-74 but for the year 1975-76 as mentioned in the challan, the petitioner deposited the sum of Rs. 18,410 over again on April 15, 1976. It is true that refund of the tax which turned out to be in excess of account of the deposit of Rs. 18,410 made on August 30, 1975, being treated as the deposit not for the year 1973-74 but for the year 1975-76, was obtained by the petitioner in pursuance of the order passed under s. 141 A but the petitioner cannot be held guilty of any contumacious conduct on this score. Once the deposit of Rs. 18,410 made on August 30, 1975, was treated as the deposit for the year 1975-76, any amount that turned out to be excess payment of tax, became in view of the mandatory provision contained in this behalf in s. 141A of the Act refundable.

In view of the foregoing discussion, we are of the opinion that the CIT committed a manifest error of law on the facts of the instant case in holding that the application for waiver/ reduction of the amount of interest paid or payable under sub-s. (8) of s. 139 of the Act was not maintainable inasmuch as the petitioner had not simultaneously deposited the amount of tax along with the return whereby voluntary disclosure was made.

Before parting with the case, we may point out that learned counsel for the parties cited certain decisions laying down rules of interpretation of a provision such as s. 273A of the Act but, in our opinion, on the view which we have taken on the facts of the instant case, it is not necessary to refer to those decisions.

In the result, this writ petition succeeds and is allowed and the impugned order dated August 30, 1982, passed by respondent No. 1, CIT, Jabalpur, is quashed and he is directed to decide the application made by the petitioner for waiver/reduction of interest paid or payable under s. 139(8) of the Act on merits afresh in accordance with law. In the circumstances of the case, there shall be no order as to costs.

[Citation : 171 ITR 576]

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