CHELDAS KHUSHALDAS PATEL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Petitioner No. 1 in Special Civil Application No. 3583 of 1989 is a partnership firm carrying on business as a Tobacco Commission Agent. Petitioner Nos. 2, 3 and 4 are partners in the said firm ('firm' for short). The firm was duly registered under the relevant provisions of Income-Tax Act, 1961 ('Act' for short). The firm and its partners had prepared statements of their income and returns for the assessment years 1976-77 to 1979-80 in time and handed over them . to their Income-Tax Practioner. Application under Form No. 12 for continuance of registration of the firm was duly signed and the same was also handed over to the Income-Tax Practitioner in time in each of the said assessment years. Advance tax was also paid in due course. The Income-Tax Practitioner engaged by the petitioners, however, did not file their returns for the said assessment years within the prescribed time. The petitioners on coming to know that their returns were not filed within prescribed time engaged another Income-Tax Practitioner, who filed them on December 4, 1980. The returns of income of the firm and the partners for the assessment years 1976-77 and 1977-78 were filed beyond a period of two years prescribed for completing assessment for those years. The firm and the partners on filing of the returns, as aforesaid, also paid tax under Section 140A of the Act. The Income-Tax Officer accepted the returns for the assessment years 1978-79 and 1979-80 and framed assessments accordingly. However, so far as assessment years 1976-77 and 1977-78 were concerned, since the returns for these years were filed beyond prescribed period of two years for making assessments, as aforesaid, the Income-Tax Officer issued notice under Section 148 of the Act against the firm and the partners. Since the returns were already filed, the firm and the partners in response to the notice under Section 148 stated that the said returns be treated as returns in response to the notice under Section 148. The Income-Tax Officer, it appears, accepted this plea and treated the returns, which were already filed, as returns in response to the notice under Section 148. These returns were also accepted and assessments were framed accordingly.

(2.) The Income-Tax Officer while framing assessments for the assessment years 1976-77 to 1979-80 as aforesaid initiated penalty proceedings under Section 271(l)(a) of the Act and ultimately levied penalty under the said provision. The Income-Tax Officer also charged interest under Section 139(8) of the Act in case of the firm and under Section 139(8) and Section 215 of the Act in case of two partners of the firm. Thereupon, the firm and the partners made application to the Commissioner of Income-Tax ('Commissioner' for short) for waiver of penalty and interest under Section 273A of the Act. These applications, which were for the assessment years 1976-77 to 1979-80 were made on January 12, 1983. It, however, appears that detailed applications for the waiver of the penalty and interest under Section 273A were again made in July 11, 1988. The Commissioner by his order dated January 4, 1989 passed in the case of the firm held that the returns of income for the assessment years 1976-77 and 1977-78 were filed beyond the time permissible under Section 139(4) of the Act and as such they could not be considered to be returns in the eye of law. It was observed that the assessments for the said two years could be made only after issuing notices under Section 148 calling upon the firm to furnish returns. Therefore, so far as assessment years 1976-77 and 1977-78 were concerned, according to the Commissioner necessary conditions for waiver were not satisfied. He, therefore, rejected the firm's prayer for waiver of penalty and interest for the assessment years 1976-77 and 1977-78. However, so far as assessment year 1978-79 was concerned, the Commissioner held that as the firm had paid advance tax more than the tax demanded and the return had been filed voluntarily, penalty and interest levied for the said assessment year deserve to be waived in full. He accordingly waived in full the penalty and interest levied for the assessment year 1978-79. So far as assessment year 1979-80 was concerned, no penally or interest was levied in the case of the firm. The Commissioner, therefore, held that the application for the said year deserved to be dismissed. So far as partner Chandulal Cheldas Patel - Petitioner No. 3 in Special Civil Application No. 3583 of 1989 was concerned, the Commissioner, as in the case of the firm held that necessary conditions for invoking provisions of Section 273A of the Act were not fulfilled for the assessment years 1976-77 and 1977-78. So far as assessment year 1978-79 was concerned, the Commissioner waived penalty but refused to waive interest under Section 139(8) and Section 215 of the Act. Since neither penalty nor interest was charged for the assessment year 1979-80, the Commissioner rejected the said partner's application as being infructuous. Identical view has been taken in the case of partner Mahendrakumar Chandulal Patel petitioner No. 4 in Special Civil Application No. 3583 of 1989. It was stated before us that the petitioners do not know whether any order under Section 273A has been passed in the case of said partner Cheldas Khushaldas Patel, petitioner No. 2 in Special Civil Application No. 3583 of 1989. The petitioners in Special Civil Application No. 3583 of of 1989, namely, the firm and the partners sought to challenge the aforesaid orders passed by the Commissioner. An objection was raised that common petition challenging orders passed by the Commissioner in the case of firm and the partners was not maintainable and, therefore, separate petitions being Special Civil Application Nos. 662, 663 and 664 of 1990 were filed on behalf of the partners, namely, Cheldas Khushaldas Patel, Chandulal Cheldas Patel and Mahendrakumar Chandulal Patel.

(3.) Since common questions arise for our consideration in these petitions, they are being disposed of by this common judgment.