MIRAJUDDIN Vs. CENTRAL BOARD OF DIRECT TAXES

JUDGEMENT

(1.) THE petitioner in this petition has prayed that the order, dt. 28th June, 1978, passed by CIT be set aside. He has also prayed that the orders, dt. 27th March, 1979, and 27th Sept., 1980, passed by ITO and CBDT respectively be set aside.

(2.) THE controversy involved in the entire case is rather narrow. The petitioner filed a petition under s. 273A before CIT concerning asst. yrs. 1970-71 to 1974-75 praying for waiver/reduction of penalties leviable under S. 271(1)(a) and interest under S. 139(8). It is not disputed that the returns were filed voluntarily and full disclosure was made. It is also incorporated in the order of the CIT that the petitioner has cooperated in completion of the assessments and paid the taxes in full. The learned CIT mentioned in his order that although the conditions envisaged in S. 273A are fulfilled but he declined to waive the penalties and interest in full since the delay in filing the returns is inordinate. The findings of the learned CIT are contrary to the settled position of law as crystallised in Jaswant Rai & Anr. vs. CBDT & Ors. (1998) 147 CTR (SC) 110 : (1998) 231 ITR 745 (SC) : TC S49.3942. Their Lordships of the Supreme Court observed "that the power under S. 271 (4A) is coupled with a duty to do justice and the CIT is under statutory obligation to exercise the power is favour of an assessee which has fulfilled all the conditions of the provisions. In deciding such a matter, therefore, he cannot take into account factors or reasons which are invalid or extraneous to the said provisions. The principal condition for grant of relief under the said provision is that the assessee should have voluntarily and in good faith made full disclosure of his income prior to the detection of the same and such disclosure could be made even otherwise than in the course of a return by submitting a petition to the CIT." The Court further observed that the levy of penalty under S. 271(1)(c) by itself would not be a circumstance to take it out of the purview of S. 271(4A) of the Act.