High Court Of Rajasthan : Jaipur Bench
Abdul Haq Ansari vs. Income Tax Officer & Anr.
Sections 273A, 276CC, Art. 226
Asst. Year 1975-76, 1976-77, 1977-78, 1978-79, 1979-80
Arun Madan, J.
Civil Writ Petn. No. 2724 of 1990
1st November, 2001
Counsel Appeared
S.M. Ali, for the Petitioner : J.K. Singhi, for the Respondent
JUDGMENT
ARUN MADAN, J. :
Heard learned counsel for the parties. The petitioner-firm by way of this writ petition, has challenged the assessment orders dt. 31st Jan., 1989 and 22nd Aug., 1989, passed by the Income-tax Officer, Jaipur (‘ITO’) and the Commissioner of Income-tax, Jaipur (‘CIT’) respectively, for the years 1975-76 to 1979-80 on the grounds inter alia that the firm’s business had been adversely affected due to the money block on petitioner’s account in USA to the tune of US $ 1,24,122.51 with the A.O. Ansari to whom goods were exported in USA. The petitioner, in para 3 of the writ petition indicated the income of the petitioner’s firm for the asst. yrs. 1975-76 to 1979-80 in the following manner : Asst. yr. Income assessed (Rs.) 1975-76 18,290 1976-77 2,294 (loss) 1977-78 1,539 (loss) 1978-79 1,29,097 1979-80 Nil (loss declared at Rs. 34,850)
It is contended by the learned counsel for the petitioner that the petitioner being an uneducated person, who is a partner of the firm, the firm earned a profit of Rs. 1,29,097 for the asst. yr. 197879, when the petitioner’s share for tax purposes was determined at Rs. 60,530, he handed over the relevant papers to the tax consultant for doing the needful. The return of income was accordingly prepared by the tax consultants after depositing a sum of Rs. 20,666 as advance tax vide Demand Draft dt. 21st Oct., 1985. He has further contended that the above return of income was filed voluntarily without having given any notice for the same.
The ITO vide his order dt. 31st Jan., 1989 under s. 273(b) of the IT Act, 1961 (for short ‘the Act’) assessed the tax at Rs. 20,666 as referred to above and imposed a penalty together with interest for the asst. yr. 1978-79 in the following manner :
Against the aforesaid order of the ITO, the petitioner preferred an appeal before the CIT, Jaipur, contending inter alia that the return for the year 1978-79 was filed voluntarily as on 7th Nov., 1985 under Amnesty Scheme of 1985 and that the return was accepted by the ITO under s. 143(3) of the Act and that the assessee had fully cooperated with the assessing authorities with regard to the various enquiries made. As regard the assessee’s request for wavier of the penalty and interest imposed upon it by the ITO, the CIT Jaipur vide his order dt. 22nd Aug., 1989, rejected petitioner’s contention and communicated the same on 23rd Dec., 1989, for the reason that since the assessee had failed to satisfy the conditions laid down in s. 273A of the Act as it was not open to the petitioner to challenge the impugned order of the ITO. It is to be noted that besides confirming the demand of Rs. 97,914 on the income of Rs. 60,533 against the petitioner for the assessment year in question, prosecution was also launched against the petitioner by way of a complaint under s. 276CC of the Act, the petitioner having failed to furnish the return of income within the stipulated time, which he was required to furnish under s. 139 of the Act. Sec. 276CC of the Act provides as under : “276CC. If a person wilfully fails to furnish in due time the return of income which he is required to furnish under sub-s. (1) of s. 139 or by notice given under cl. (1) of sub-s. (1) of s. 142 or s. 148, he shall be punishable : (i) in a case where the amount of tax, would have been evaded if the failure had not been discovered, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine; (ii) in any other case, with imprisonment of a term which shall not be less than three months but which may extend to three years and with fine : Provided that a person shall not be proceeded against under this section for failure to furnish in due time the return of income under sub-s. (1) of s. 139 : (i) for any assessment year commencing prior to the 1st day of April, 1975; or (ii) for any assessment year commencing on or after the 1st day of April, 1975, if— (a) the return is furnished by him before the expiry of the assessment year; or (b) the tax payable by him on the total income determined on regular assessment, as reduced by the advance tax, if any, paid and any tax deducted at source, does not exceed three thousand rupees.” Complaint was also preferred against the petitioner in the Court of Chief Judicial Magistrate (Economic Offences), Jaipur of which a criminal case was registered vide Case No. 373/86 of which the proceedings are still pending before the said Court.
2. During the course of hearing Shri J.K. Singhi learned counsel representing the Revenue has vociferously contended that instead of participating in the proceedings by setting up a defence, if any, available to the petitioner before the competent Court, i.e., CJM (EO), Jaipur, the petitioner has come up by way of this writ petition challenging the assessment orders and also imposition of penalties as referred to hereinabove. Learned counsel for the respondents however contended that the proper course available to the petitioner was that he has first to exhaust the remedy available to him under the Act instead of directly rushing to this Court by way of filing the instant writ petition under Art. 226 of the Constitution.
3. Learned counsel for the petitioner has contended that the CIT, Jaipur, whose order dt. 22nd Aug., 1989, is under challenge in this petition, had totally discarded the provisions of s. 273(A) of the Act, which itself laid down that it is open to the CIT to waive or reduce amount of penalty or waive the interest paid or payable under the various provisions of the Act, if : (i) the return of income has been filed voluntarily by the assessee before the receipt of notice under s. 139(2) of the Act or under s. 148 thereof; (ii) the tax has been paid under s. 140A of the Act before filing of return; (iii) the assessee has cooperated fully in the assessment proceedings; and (iv) the voluntary return has been filed in good faith declaring full particulars of share income as computed by the ITO. It is only under the above circumstances that the impugned order of the CIT, which is under challenge in this writ petition, could be challenged in the event of failure to conform to any of the conditions as referred to above but not otherwise.
4. It is pertinent to mention that return for the asst. yr. 1978-79 was filed by the petitioner belatedly on 7th Nov., 1985, as per Annexure-3 on the record, which is the order dt. 31st Jan., 1989, passed under s. 271(1)(a) of the Act by the ITO, Ward 2(4), Jaipur. A perusal of the said order reveals that the default notice was issued to the petitioner as per s. 274 r/w s. 271(1)(a) of the Act and served upon the assessee on 9th March, 1987, calling upon him to show cause as to why penalty be not imposed in view of the default. Opportunity was also afforded to the assessee of hearing as on 12th Dec., 1988, but no reply was filed. Thereafter the assessee had personally appeared before the ITO and had filed the return under the Amnesty Scheme, which came into existence on 15th Nov.,
1985, and that his case was fully covered by the circulars issued by the CBDT. The assessee was also given a show-cause notice on 12th Dec., 1988, but no reply was received to the same. He has further contended that due to financial crunches he could not prepare the return for the assessment year in question and accordingly the return could not be filed within the statutory time allowed by the Act. A perusal of the order dt. 23rd Aug., 1989, passed by the CIT, Jaipur, reveals that the assessee did not fulfil the conditions necessary for deriving the benefit of s. 273A of the Act inasmuch as the demand created on assessment remains outstanding, therefore, the learned CIT while passing the impugned order observed that there was no case on merit and had accordingly rejected the application for giving him the benefit as regards the waiver of the penalties. Shri S.M. Ali, learned counsel for the petitioner has contended that while passing the impugned order the CIT had not taken into consideration that the penalty imposed on the petitioner far exceeds the amount which has due as per demand of Rs. 97,914 on the income of Rs. 60,533, is not tenable in the eye of law. He has further contended that the CIT has also sanctioned prosecution of the petitioner and a complaint under s. 276CC of the Act has also been preferred against the petitioner before the CJM (EO), Jaipur. Be that as it may, I am of the view that the petitioner was not properly advised as regards filing of this writ petition challenging the order of the CIT and instead he should have participated in the proceedings before the competent Court viz., CJM (EO), Jaipur, by setting up any defence as admissible to him in accordance with law.
8. The learned CIT vide communication dt. 21st Mach, 1991 (Ann. 6), addressed to the petitioner, on petitioner’s application under s. 279(2) of the Act, had given option as regards compounding of the offence under s. 276CC of the Act for the asst. yr. 1978-79 by depositing the penalty of Rs. 99,871 towards the composition charges, in addition to the litigation expenses, if any, for which he was required to send a written communication under due intimation to the Department but he failed to do so. It was left open to the petitioner to file return within fifteen days of receipt of the above. Hence, I do not find any satisfactory explanation on the record as to whether the communication was at all complied with by the petitioner.
It is further open to the petitioner that in case he wishes to contest the proceedings initiated against him before the CJM (EO), Jaipur in criminal case No. 373/86, which I am informed is still pending, to set up any plausible defence, if any, as admissible to him as also to contest the prosecution launched against him under s. 276CC of the Act, in accordance to the law. He is also at liberty to take any other alternative remedy, in accordance with law. Both the writ petitions stand disposed of accordingly.
[Citation : 257 ITR 558]
