High Court Of Rajasthan
Ishwardas & Brothers vs. CIT & ANR
Sections 194A, 201, 221
Asst. Year 1999-2000
M.R. Calla & Prakash Tatia, JJ.
Civil Special Appeal No. 391 of 2002
20th January, 2003
Dinesh Mehta, for the Appellants : Sandeep Bhandawat, for the Respondents
M.R. CALLA, J. :
All these three special appeals are directed against the common judgment and order dt. 22nd Feb., 2002 [reported as Chhogamal Chiranji Lal & Ors. vs. CIT & Ors. (2002) 174 CTR (Raj) 431âEd.] passed by the learned Single Judge. Since the facts and questions involved in these cases are identical, we propose to decide all these appeals by this common judgment and order as under.
The appellants herein i.e., original petitioners had received the Form 15H under the IT Act on 1st April, 1999, as had been sent by the recipient of the interest on 31st March, 1999. The question, therefore, arose as to whether the original petitioners were defaulting assessees or not because they failed to deduct the tax at source as on 31st March, 1999. The ITO (TDS) Hanumangarh, therefore, gave notices to the petitioners on 26th May, 1999, mentioning therein that they were required to show-cause as to why their case should not be referred to CIT, Bikaner headquarters at Jaipur/Jt. CIT, Bikaner, for levy of penalty with the further mention that the reply, if any, should reach the ITO (TDS), Hanumangarh, within ten days of the receipt of this letter. It does not transpire from the pleadings that the matter was ever referred to the CIT or the Jt. CIT as mentioned in this letter dt. 26th May,1999.
We called upon learned counsel for the respondents to show us as to whether the matter was ever referred to the CIT. However, learned counsel for the respondents failed to show any such material except referring to the contents of para No. 10 of the reply to the writ petition which he has read out before us in extenso. Contents of para No. 10 of the reply do not show that the matter was ever referred to the CIT. On the contrary, it has been pleaded that vide order dt. 12th Aug., 1999, passed by the ITO (TDS), Hanumangarh, the original petitioners were held to be defaulters within the meaning of s. 201 r/w s. 221 of the Act and were, therefore, directed to pay the penalty amount being a sum equivalent to 10 per cent of the interest amount paid by them. This pleading is hardly an answer to the compliance of the condition mentioned by the ITO (TDS) in the show-cause notice dt. 26th May,1999 (Annex. 2), itself. It was required to be determined in the first instance as to how the original petitioners were defaulting assessees and only thereafter, the question could arise with regard to imposition of penalty.
Learned Single Judge himself has noted the argument in the order that it was a case of technical default inasmuch as the letter was received by the present petitioners only a day after i.e., on 1st April, 1999. We, therefore, find on the facts and circumstances of these cases that in view of Annex. 2, the ITO (TDS), Hanumangarh, should have sent the matter to the concerned CIT so as to determine as to whether the original petitioners could be treated as defaulting assessees or not for the purpose of imposing penalty. The order passed by the learned Single Judge rejecting the writ petition in toto is, therefore, not sustainable. The impugned judgment and order dt. 22nd Feb.,2002, is set aside. We deem it proper, on the facts and circumstances of cases, to remand the matters to the concerned CIT, who will first determine as to whether the original petitioners could be treated as defaulting assessees or not. The earlier order dt. 24th Jan., 2001, as was passed by the CIT shall not come in his way to decide this question now after hearing the appellants afresh.
All the three appeals are hereby allowed in the terms as above. The amount deposited by the appellants in pursuance of the order passed on 12th Aug., 1999, by the ITO (TDS) r/w CITâs order dated 24th Jan., 2001, shall not be withdrawn by the appellants till the final decision is taken in the remanded proceedings.
[Citation : 265 ITR 599]