RAJASTHAN COMMUNICATION LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner, namely, Rajasthan Communications Limited, is a Government undertaking". Like any other assessee, the petitioner was required to file the income-tax returns. THE petitioner did file the income-tax return for the year 1988-89 which was scrutinised and ultimately the petitioner was burdened with tax of Rs. 13,77,878. THE petitioner deposited a total amount of Rs. 12,45,339 out of the tax and interest demanded as per the demand notice. Under the provisions of Section 273A(1) Clauses (i) and (iii) read with Clause (c), the petitioner had applied for waiver of the interest vide his application dated February 5, 1990, which application is attached as annexure-3 with the writ petition. It has been stated by the petitioner that because of circumstances beyond its control and because of certain financial strains, there was certain lapse on the part of the petitioner and a request was made to deposit the additional tax in instalments. It was further stated in annexure-2 that because of facing a tremendous financial strain, it was not finding it possible to fulfil the business commitments, because of the reason that the company had suffered heavily due to negligent manipulation and fraud committed by its ex-financial controller, the company had been put into loss. THE company had narrated the circumstances and the reasons for filing the revised income-tax return and had prayed for waiver of the interest of the amount in regard to three counts, i.e., Rs. 82,800 under Section 139(8), Rs. 1,84,585 under Section 215/217 and an amount of Rs. 6,657 under Section 216 of the Income-tax Act. It is true that the company had given reasons for filing the revised tax return and because of those reasons mentioned therein, the company was seeking the waiver of the total amount of interest levied on the company as is clear from the reading of annexure-3.

(2.) THE Commissioner of Income-tax, vide annexure-5 rejected the request of the petitioner, by noting the fact that against the demand of Rs. 13,77,878 made from the petitioner towards the tax and interest, the petitioner had only deposited an amount of Rs. 12,45,399 and thus an amount of Rs. 1,31,254 still remained payable by the company. THE Commissioner was of the opinion that the strict requirements of Section 273A were not complied with.

(3.) WHILE exercising powers under Section 273A of the Income-tax Act, the Commissioner did observe in the order dated November 25, 1992, that because of the reason that it has not been mentioned that any satisfactory arrangement for the remaining amount to pay tax had been made, but in the circumstances and in view of the fact that the petitioner-company was a public undertaking and attached with RIICO, it would have been advisable for the Commissioner to direct the petitioner to furnish some guarantee instead of totally dismissing the petition. In the circumstances where no such guarantee or arrangement has been given by way of inadvertence omission or otherwise, it shall be appropriate in the interest of justice that the authorities concerned should give at least one chance to the parties concerned to make arrangements if the circumstances so required: In the present case, it was a fit case where the Commissioner ought to have asked the petitioner to make arrangements for guarantee if the petitioner wanted that its request be entertained.