SHAYAMA SANJAY SHAH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) By this petition under article 226 of the Constitution of India, the petitioner has challenged the order dated March 28, 2001, passed by the Commissioner of Income-tax, Surat, under section 273A of the Income-tax Act, 1961 (the Act), whereby, he has rejected the petitioner's application for waiver of interest and penalty. The facts of the case stated briefly are that in respect of the assessment year 1987-88, the petitioner was charged interest under section 139 as also under section 215of the Act and penalty was also levied under sections 271(1)(a) and 273(1)(b) of the Act. The petitioner made an application under section 273 of the Act on November 30, 1992, inter alia, stating that the petitioner had fulfilled all the conditions mentioned in section 273A of the Act for total waiver of the interest and penalties. It was also stated in the application that the petitioner had voluntarily and in good faith made full and true disclosure of her income prior to the issue of notice under section 139(2) of the Act and had co-operated in the inquiry relating to the assessment of income and had also paid the tax and interest payable in consequence of the assessment order. After a period of about eight years the Commissioner of Income-tax, Surat, the respondent herein, rejected the said application by the impugned order dated March 28, 2001. Being aggrieved, the petitioner has filed the present petition challenging the said order.

(2.) Mr. J.P. Shah, learned advocate appearing on behalf of the petitioner, invited attention to the provisions of section 273A of the Act to submit that while considering an application for waiver under the said section, the Commissioner is required to record satisfaction in respect of the matters provided under the said section. Inviting attention to the impugned order, it was submitted that the Commissioner has rejected the application on the ground that the reasons advanced by the petitioner for not filing the return in time were not reasonable and that the petitioner had already made payment of entire penalties and interest demanded by the said order and, therefore, there was nothing to waive. It was submitted that the Commissioner has failed to take into consideration the relevant factors as contemplated under section 273A of the Act and has rejected the application on extraneous grounds which are not relevant in so far as the provisions of section 273A of the Act are concerned. Referring to the provisions of section 273A of the Act, it was submitted that while making the order under section 273A of the Act the Commissioner was required to consider the relevant factors as envisaged thereunder even in a case where the assessee had paid the tax and interest payable in consequence of the order in respect of which the application under section 273A had been filed. It was, accordingly, submitted that the second ground for rejecting the application, viz., the payment of entire interest and penalty demanded under the order in respect of which the application had been filed had already been made, and, therefore, there was nothing to waive, is contrary to the provisions of section 273A of the Act under which the Commissioner has exercised powers. It was submitted that under the circumstances, the impugned order being inconsistent with the provisions of section 273A of the Act is required to be quashed and set aside. In support of his submission, the learned advocate placed reliance upon a decision of this High Court in the case of Vinodchandra C. Patel v. CIT, 1996 217 ITR 232.

(3.) On the other hand, Mrs. Mauna Bhatt, learned senior standing counsel appearing on behalf of the respondent, submitted that powers exercised by the Commissioner under section 273A of the Act are in the nature of discretionary powers, hence, this court in exercise of powers under article 226 of the Constitution of India would ordinarily not interfere with the same and substitute its own opinion in place of that of the Commissioner. It was, accordingly, urged that the petition being devoid of merit deserves to be dismissed.