K.S. Bakthavatsalam, J.
1. By consent of the parties these writ petitions are taken up for final disposal.
2. The petitioner challenges annexure G, the order passed by the first respondent.
3. The facts are :
The petitioner filed the returns for the assessment years 1980-81 to 1983-84 under the Income-tax Act, 1961. After the assessment orders were passed, the petitioner sought to invoke the provisions under section 273A of the Income-tax Act, 1961 (hereinafter called 'the Act'), under which the Commissioner is authorised to waive or reduce the interest. The Commissioner of Income-tax, Karnataka-II, passed an order under section 273A of the Act on October 5, 1993, rejecting the request of the petitioner to waive interest, except for 1979-80, for the assessment years 1980-81 to 1984-85 on the ground that though the returns of income have been filed voluntarily and the income disclosed in full, taxes on the returned income have not been fully paid, which is one of the conditions to be satisfied for waiver of interest under sections 139(8) and 217 of the Act (annexure G). It, seems the petitioner moved an application under section 154 of the Act for rectification. The petitioner filed his application under section 154 of the Act on January 3, 1996, with a request to the Commissioner for early disposal of the petition and also for giving an opportunity of being heard in support of his case. The application under section 154 of the Act was entertained and was dismissed by the Commissioner as per annexure G on June 22, 1996. This order is under challenge before this court, i.e., the order passed by the Commissioner under section 154 of the Act.
4. The petitioner alleges that the Commissioner being a quasi-judicial authority is bound to hear the petitioner and pass an order, and that the Commissioner had passed the order in total negation of the principles of natural justice, inasmuch as the petitioner has not been given an opportunity of being heard. It is also alleged that the petitioner has satisfied all the conditions except the condition regarding payment of tax on the income declared. According to the petitioner, the view taken by the petitioner is not borne out by the express provisions of section 273A of the Income-tax Act. According to the petitioner, the Commissioner has read into the provisions of section 273A of the Act, the condition that tax on the disclosed income should be paid at the time of disclosure itself or at the time of filing the return and not later and if such tax is paid later, the petitioner is debarred from claiming the benefit of section 273A of the Act and a reading of the section does not warrant such an interpretation. The petitioner also alleges that the provisions of section 273A of the Act nowhere require that the tax on the income declared should have been paid within the period specified under section 140A of the Act. It is also stated that section 273A of the Act is beneficial legislation for the benefit of the tax-payers and, therefore, a beneficial legislation conferring certain rights upon persons like the petitioner, the words that are not in the provision cannot be introduced to impose a restriction upon such rights. The petitioner also relies upon a judgment of the Gujarat High Court reported in Parshottam Nagindas v. B. R. Adwalpalkar : [1996]218ITR392(Guj) in support of his contention.
5. A statement of objection has been filed by the Department. It is stated that the Commissioner of Income-tax has passed an order under section 273A of the Act on October 5, 1993, declining to grant any relief of waiver or reduction of the interest amount on the ground that one of the conditions of waiver of interest levied under section 139(8) and section 217 of the Act have not been satisfied. It is also pointed out that the order passed under section 273A was not questioned by the petitioner before any forum. It is stated that inasmuch as the order dated October 5, 1993, passed under section 273A of the Act has not been assailed and had become final the writ petitions are liable to be dismissed. It is also pointed out that the order passed by the first respondent under section 154 of the Act which is challenged herein does not suffer from any infirmity. It is also pointed out that the question as to whether there is any payment of tax satisfying the condition as envisaged and within the meaning of section 273A of the Act is an arguable question and, therefore, it cannot be said that there is any mistake apparent from the record. It is pointed out that as stated in the order passed by the first respondent under section 154 of the Act, there is non-fulfillment of the condition as envisaged under section 273A of the Act. It is also pointed out that the contention urged by the petitioner that payment of assessed tax before filing of the petition under section 273A of the Act should be taken as sufficient compliance with the requirement of payment of tax on the disclosed income is not tenable. It is pointed out that section 273A envisages a condition precedent for grant of any relief of waiver or reduction of interest that the applicant ought to have 'paid tax on the income so disclosed'. Inasmuch as the petitioner has not paid tax on the income so disclosed, it is stated that rightly the application under section 273A has been rejected. So also the rectification petition filed by the petitioner under section 154 of the Act. It is pointed out that, admittedly, the petitioner has not paid the tax on the returned income, as such there is non-fulfillment of the condition as envisaged under section 273A of the Act. It is also pointed out that the first respondent has passed a speaking order under section 154 of the Act and non-affording of personal hearing is not fatal to the validity of the said order. It is pointed out that no principles of natural justice have been violated.
6. Learned counsel for the petitioner contended that the order passed by the first respondent in this case is violative of the principles of natural justice. Learned counsel contended that the respondent ought to have given an opportunity to the petitioner to show how the respondent has not understood the case of the petitioner and if an opportunity had been given, the petitioner would have convinced the respondent. The other point urged by learned counsel for the petitioner is that to obtain the benefit under section 273A of the Act, as it stood then, no time limit is fixed to claim the benefit, in other words, nowhere in the section is it stated at what point of time tax has to be paid to obtain the benefit of waiver of interest under section 273A of the Act. Though learned counsel accepts that the order passed under section 273A of the Act was not assailed before any forum, the petitioner thought fit to file a rectification application under section 154 of the Act and the Commissioner who decided against the petitioner has not understood the proposition placed before him by the petitioner. According to learned counsel for the petitioner the dicta laid down by the Gujarat High Court in Parshottam Nagindas v. B. R. Adwalpalkar : [1996]218ITR392(Guj) clearly applies to the facts of this case.
7. According to learned counsel for the petitioner, the Gujarat High Court has held that if payment of tax is made at any time before the Commissioner is to consider the reduction or waiver of amount of interest payable under section 139(8), 215 or 217 or penalty under section 273(b), it would fulfil the conditions of clause (c) of section 273A of the Act. Learned counsel also points out that the Department has issued circulars and a reading of the circular clearly supports the case of the petitioner and the order passed by the Commissioner is quite contrary to the tenor of the circular issued by the authorities. Learned counsel took me through the relevant provisions of the Act and argued that this is a fit case where rectification has to be made and it cannot be said that the petition for rectification is not maintainable.
8. Per contra, learned counsel for the Department contended that first of all the petition under section 154 of the Act is not maintainable as there is no error apparent from the record. According to learned counsel for the Department, section 154 does not cover any mistake which could be discovered by complicated process of investigation, argument or proof. Learned counsel points out that the error which is apparent on the face of the record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact or law. According to learned counsel, the power of rectification can be exercised only when there is a mistake apparent on the face of the record and that mistake is obvious, patent and should not be a debatable point of law.
9. Learned counsel for the Department took me through the provisions of section 273A as it stood then and points out that clause (c) of section 273A(1) has not been satisfied for the petitioner to obtain the benefit of waiver of interest. Learned counsel relied upon two decisions of the Madras High Court reported in S. M. Ziaddin v. CIT : [1993]203ITR136(Mad) and B. Thangammal v. CIT : [1995]215ITR261(Mad) in support of his contention that if the conditions set out in section 273A of the Act are not complied with, the petitioner cannot invoke the provisions of that section. Learned counsel also relied upon a decision of the Supreme Court reported in Union of India v. Jesus Sales Corporation, : 1996(83)ELT486(SC) for the proposition that merely on the ground that before passing an order the respondent was not given an oral hearing, it cannot be said that the principles of natural justice have been violated and that is more important in the context of taxation and revenue matters.
10. I have considered the arguments of learned counsel for the petitioner and also learned counsel for the Department. In these cases, the petitioner challenges the order passed by the Commissioner under section 154 of the Act refusing to rectify the order passed under section 273A of the Act. First of all, I am of the view that refusal to rectify the order passed under section 273A of the Act, on the facts and circumstances of this case, cannot be said to be erroneous in law. The only point on which the order was passed under section 273A as I could see it is that the conditions precedent under section 273A of the Act for waiver of interest are not complied with by the petitioner and as such he is not entitled to waiver of interest. It is an admitted fact that the conditions precedent under section 273A of the Act have not been complied with. Section 273A of the Income-tax Act as it stood then reads as follows :
'273A. Power to reduce or waive penalty, etc., in certain cases. - (1) Notwithstanding anything contained in this Act, the Commissioner may, in his discretion, whether on his own motion or otherwise, -
(i) reduce or waive the amount of penalty imposed or imposable on a person under clause (i) of sub-section (1) of section 271 for failure, without reasonable cause, to furnish the return of total income which he was required to furnish under sub-section (1) of section 139; or
(ii) reduce or waive the amount of penalty imposed or imposable on a person under clause (iii) of sub-section (1) of section 271; or
(iii) reduce or waive the amount of interest paid or payable under sub-section (8) of section 139 or section 215 or section 217 or the penalty imposed or imposable under section 273,
if he is satisfied that such person -
(a) in the case referred to in clause (i), has, prior to the issue of a notice to him under sub-section (2) of section 139, voluntarily and in good faith made full and true disclosure of his income;
(b) in the case referred to in clause (ii), has, prior to the detection by the Income-tax Officer, of the concealment of particulars of income or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, made full and true disclosure of such particulars;
(c) in the cases referred to in clause (iii), has, prior to the issue of a notice to him under sub-section (2) of section 139, or where no such notice has been issued and the period for the issue of such notice has expired, prior to the issue of notice to him under section 148, voluntarily and in good faith made full and true disclosure of his income and has paid the tax on the income so disclosed,
and also has, in all the cases referred to in clauses (a), (b) and (c), co-operated in any enquiry relating to the assessment of his income and has either paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year.
Explanation 1. - For the purposes of this sub-section, a person shall be deemed to have made full and true disclosure of his income or of the particulars relating thereto in any case where the excess of income assessed over the income returned is of such a nature as not to attract the provisions of clause (c) of sub-section (1) of section 271.'
11. So, a reading of clause (c) clearly shows that the assessee should have made disclosure of income and should have paid the tax on the income so disclosed. There is no doubt that, on the facts and circumstances of this case, it has not been done. On the other hand, the argument of learned counsel for the petitioner seems to be that the provisions of the Act do not fix the point of time at which the tax to be paid and as such the petitioner is entitled to the benefit of section 273A of the Act. I am unable to agree with the contention of learned counsel. When Parliament has clearly enacted the provision in section 273A of the Act, as extracted above, I do not find any difficulty to hold that the petitioner is not entitled to invoke the provisions of section 273A of the Act. That is the view taken by the two learned judges of the Madras High Court in B. Thangammal v. CIT : [1995]215ITR261(Mad) and S. M. Ziaddin v. CIT : [1993]203ITR136(Mad) . In B. Thangammal v. CIT : [1995]215ITR261(Mad) , Venkataswami J., as he then was, held as follows (headnote) :
'Unless the conditions precedent contemplated under section 273A of the Income-tax Act, 1961, for waiver of interest are complied with, the assessee cannot invoke the provisions of that section.
Held, dismissing the writ petition, that the petitioner was represented by a person authorised by her, who was in possession of all relevant records. Hence, the contention that the petitioner was not given a reasonable opportunity to be heard and there was a violation of the principles of natural justice could not be accepted. While submitting the returns, the petitioner had not paid the tax on the admitted income for the assessment years 1974-75 and 1975-76. The petitioner had not paid the difference in tax between the income returned and the income assessed for all the other years. The petitioner had not, therefore, complied with the conditions precedent for invoking section 273A of the Act. The Commissioner of Income-tax was justified in refusing to waive the interest charged under sections 139 and 217 of the Act.'
12. Raju J., of the Madras High Court in S. M. Ziaddin v. CIT : [1993]203ITR136(Mad) has held as follows (headnote) :
'The conditions precedent for the exercise of the discretion for waiver or reduction of the penalty or interest are those mentioned in clauses (a), (b) and (c) of section 273A(1) of the Income-tax Act, 1961. Disclosure of income coupled with the payment of the tax admittedly due on the admitted income is a condition precedent for entitling an assessee for consideration of his claim for waiver of the penalty as well as the interest chargeable and unless the condition is satisfied the court cannot interfere with the refusal to exercise his discretion by the Commissioner of Income-tax under section 273A.
A statutory prescription in the nature of a condition precedent cannot be mutilated by taking into account the mistake pleaded or bona fides alleged. Consequently, it could not be held that any error had been committed in the exercise of the discretion by the Commissioner of Income-tax.'
13. However, a Division Bench of the Gujarat High Court has struck a different note in Parshottam Nagindas v. B. R. Adwalpalkar : [1996]218ITR392(Guj) . The Division Bench while considering section 273A of the Act has held that it is a beneficial provision and should be interpreted in a liberal manner. The Division Bench has held at page 401 as follows :
'Amidst these provisions, we revert back to the provision which has this attention call. What is the meaning of the words 'any such person ... has paid the tax on the income so disclosed', appearing in clause (c) of sub-section (1) of section 273A. Is it to be implicit in these expressions that such person has paid the tax on income so disclosed at the time of disclosure, or when it has become due under any provision of the Act or payment at any time before the exercise of power fulfils the requirement for such exercise.
Obviously, without adding words like 'as per section 140A', or 'in accordance with the provisions of the Act', or 'within the time prescribed', the plain reading of the provision does not lead to such implicit meaning of the words existing in the statute.'
14. After stating so, the learned judges have gone into the question of interpretation or construction of the statute and has held that it is beneficial legislation and should be interpreted liberally. With great respect, I am not able to agree with the view taken by the learned judges of the Gujarat High Court.
15. It is well settled that there is no equity in tax and I am not able to subscribe to the principle of beneficial legislation in taxation laws. In my view, the learned judges of the Madras High Court have arrived at the correct conclusion and with great respect I accept the view taken by the learned judges of the Madras High Court, cited supra.
16. The other decision relied upon by learned counsel is a judgment of the Supreme Court in CIT v. Filmistan Ltd. : [1961]42ITR163(SC) , wherein the Supreme Court had an occasion to consider the provision for payment of tax as a condition precedent before filing an appeal to the Appellate Assistant Commissioner.
17. While construing that provision, the Supreme Court has held as follows (headnote) :
'Held, that the meaning of the words 'no appeal shall lie' in the first proviso to section 30(1) of the Income-tax Act is not that no memorandum of appeal can be presented. All that the proviso means is that the appeal will not be held to be properly filed until the tax has been paid. If, for instance, the memorandum of appeal is filed on the 20th day, i.e., ten days before the period of limitation expires and the tax is paid within the rest of the ten days, the appeal will be a proper appeal; it will be within time and no question of limitation will arise, but if the tax is paid after the period of limitation has expired it will be taken to have been filed on the day when the tax is paid even though the memorandum of appeal was presented earlier and within the period of limitation. The question will then have to be decided whether there was sufficient cause for condonation of delay.'
18. Learned counsel for the petitioner relies upon this decision in support of his contention that no time limit is prescribed in the provisions of the Income-tax Act, 1961, to claim the benefit under section 273A of the Act. I am unable to agree with the contention of learned counsel. The principle laid down by the Supreme Court in the case cited supra is not applicable to a question of waiver of interest under section 273A of the Act.
19. That apart, I am not convinced that this is a case where the petitioner can challenge the order of refusal to rectify the order passed under section 154 of the Act. It is settled law that any question which comes within the scope of section 154 of the Act, it should be apparent from the record. It is settled law that the mistake should be apparent from the record and should not be a debatable point of law or failure to apply the law to a set of facts (see T. S. Balaram, ITO v. Volkart Bros. : [1971]82ITR50(SC) . On the facts of this case, it is clear that the petitioner's application for rectification is not maintainable. That apart, I do not think that an opportunity need be given to the petitioner as contended by learned counsel for the petitioner. As held by the Supreme Court in Union of India v. Jesus Sales Corporation : 1996(83)ELT486(SC) , failure to give an opportunity to the petitioner in my view will not vitiate the order passed under section 154 of the Income-tax Act, on the facts and circumstances of the case. The argument of learned counsel for the petitioner seems to be that since the Income-tax Act does not pin-point the time at which the tax should be paid, the petitioner is entitled to the benefit under section 273A of the Act. I am not able to agree the contention of learned counsel as the contention is against the statutory provisions contained in the Act. When Parliament has clearly set out the conditions precedent to make an application under section 273A of the Income-tax Act and when that condition precedent is not fulfilled, I do not think either the order passed under section 273A of the Act is vitiated or the order passed under section 154 of the Act is erroneous in law. There are no merits in these petitions.
20. Writ petitions are, accordingly, dismissed.