TILAKRAJ BHAKTAVARMAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN the petition for a writ of certiorari, the petitioner calls in question an order passed by the Commissioner of INcome-tax, Karnataka-II, rejecting the petitioner's application under section 273A(1) of the INcome-tax Act, 1961, for waiver of penalty imposable under section 271(1)(c) of the INcome-tax Act. A few facts necessary for the disposal of the petition may be stated at this stage.

(2.) THE petitioner filed a return for the assessment year 1985-86, declaring a total income of Rs. 10,360. An order of assessment under section 143(3) of the Act was passed by the Income-tax Officer on January 30, 1987. Some time later, the petitioner claims to have discovered that he had advanced a loan of Rs. 2,25,000 to one Sri S. G. Patil, on a pro note, out of the cash resources available with him, which amount had not been disclosed by the petitioner in the return filed. He appears to have been advised to disclose the same which he did in a disclosure statement filed on October 12, 1988, before the Commissioner of Income-tax, in which he made a request for waiver of penalties leviable in exercise of the powers under section 273A of the Income-tax Act.

(3.) MR. Hanumantha Rao, learned counsel appearing for the petitioner, argued that the impugned order passed by the Commissioner was violative of the principles of natural justice for admittedly no opportunity of being heard was granted to the petitioner before the making thereof. He relied upon the judgment of the Supreme Court in C. B. Gautam's case [1993] 199 ITR 530 and P. V. Pai v. R. L. Rinawma, Dy. CIT in support of his submission that it was imperative for the Commissioner to have granted an opportunity to the petitioner before dismissing the application filed by the latter. He further argued that the reason given by the Commissioner for rejecting the application was wholly untenable as the return filed by the petitioner was not only voluntary but in good faith making full and true disclosure of his income. He relied upon :