Abdul Haq Ansari Vs. Ito and anr. - Court Judgment

Excerpt:
counsels: s.m. ali, for the assessee j.k. singhi, for the revenue head note: income tax constitution of india writ--maintainabilitypetition filed against commissioner's order under section 273a and assessment and penalty orders catch note: the assessee filed application under section 273a, commissioner held that since assessee had failed to satisfy conditions laid down in section 273a as it was not open to petitioner to challenge impugned order of income tax officer--instead of confirming demand of tax revenue launched prosecution--the petitioner filed writ petition against orders of commissioner and assessing officer--not maintainable--the petitioner was not properly advised as regards filing of this writ petition challenging order of commissioner and instead he should have participated in proceedings before competent court, viz., cjm (eo) by setting up any defence as admissible to him in accordance with law--he is also at liberty to take any other alternative remedy, in accordance with law. ratio: the petitioner was not properly advised as regards filing of this writ petition challenging order of commissioner and instead he should have participated in proceedings before competent court, viz., cjm (eo) by setting up any defence as admissible to him in accordance with law--he is also at liberty to take any other alternative remedy, in accordance with law. held: a perusal of the order passed by the commissioner, reveals that the assessee did not fulfil the conditions necessary for deriving the benefit of section 273a of the act inasmuch as the demand created on assessment remains outstanding, therefore, the commissioner while passing the impugned order observed that there was no case on merit and had accordingly rejected the application for giving him the benefit as regards the waiver of the penalties.be that as it may, the petitioner was not properly advised as regards filing of this writ petition challenging order of commissioner and instead he should have participated in proceedings before competent court, viz., cjm (eo) by setting up any defence as admissible to him in accordance with law. he is also at liberty to take any other alternative remedy, in accordance with law.it is further open to the petitioner that in case he wishes to contest the proceedings initiated against him before the cjm (eo), in criminal case is still pending, to set up any plausible defence, if any, as admissible to him as also to contest the prosecution launched against him under section 276cc of the act, in accordance to the law. he is also at liberty to take any other alternative remedy, in accordance with law. application: also to current assessment year. decision: in favour of revenue. constitution of india art 226 income tax act 1961 s.273a in the rajasthan high court : jaipur bench arun madan, j. - - as regard the assessee's request for wavier of the penalty and interest imposed upon it by the income tax officer, the commissioner jaipur vide his order dated 22-8-1989, rejected petitioner's contention and communicated the same on 23-12-1989, for the reason that since the assessee had failed to satisfy the conditions laid down in section 273a of the act as it wad not open to the petitioner to challenge the impugned order of the income tax officer. 60,533 against the petitioner for the assessment year in question, prosecution was also launched against the petitioner by way of a complaint under section 276cc of the act, the petitioner having failed to furnish the return of income within the stipulated time, which he was required to furnish under section 139 of the act. if a person wilfully fails to furnish in due time the return of income which he is required to furnish under sub-section (1) of section 139 or by notice given under clause (1) of sub-section (1) of section 142 or section 148, he shall be punishable :(i) in a case where the amount of tax, would have been evaded if the failure had not been discovered, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine; (ii) in any other case, with imprisonment of a term which shall not be less than three months but which may extend to three years and with fine :provided that a person shall not be proceeded against under this section for failure to furnish in due time the return of income under sub-section (1) of section 139 :(i) for any assessment year commencing prior to the 1-4-1975; or (ii) for any assessment year commencing on or after the 1-4-1975, if (a) the return is furnished by him before the expiry of the assessment year; and (iv) the voluntary return has been filed in good faith declaring full particulars of share income as computed by the income tax officer. it is only under the above circumstances that the impugned order of the commissioner, which is under challenge in this writ petition, could be challenged in the event of failure to conform to any of the conditions as referred to above but not otherwise. 99,871 towards the composition charges, in addition to the litigation expenses, if any, for which he was required to send a written communication under due intimation to the department but he failed to do so.arun madan, j.heard learned counsel for the parties.the petitioner-firm by way of this writ petition, has challenged the assessment orders dated 31-1-1989 and 22-8-1989, passed by the income tax officer, jaipur and the commissioner of income tax, jaipur respectively, for the years 1975-76 to 1979-80 on the grounds inter alia that the firm's business had been adversely affected due to the money block on petitioner's account in usa to the tune of us $ 1,24,122.51 with the assessing officer ansari to whom goods were exported in usa. the petitioner, in para 3 of the writ petition indicated the income of the petitioner's firm for the assessment years 1975-76 to 1979-80 in the following manner :assessment yearincome assessed (rs.)1975-7618,2901976-772,294 (loss)1977-781,539 (loss)1978-791,29,0971979-80nil (loss declared at rs. 34,850)it is contended by the learned counsel for the petitioner that the petitioner being an uneducated person, who is a partner of the firm, the firm earned a profit of rs. 1,29,097 for the assessment year 1978-79, when the petitioner's share for tax purposes was determined at rs. 60,530, he handed over the relevant papers to the tax consultant for doing the needful. the return of income was accordingly prepared by the tax consultants after depositing a sum of rs. 20,666 as advance tax vide demand draft dated 21-10-1985. he has further contended that the above return of income was filed voluntarily without having given any notice for the same.the income tax officer vide his order dated 31-1-1989 under section 273(b) of the income tax act, 1961 (hereinafter referred to as 'the act') assessed the tax at rs. 20,666.as referred to above and imposed a penalty together with interest for the assessment year 1978-79 in the following manner :assessment yearint. charged under sectionpenalty imposed/imposable 139(8)215271(1)(a)2731978-7918,69119,51535,9483,000against the aforesaid order of the income tax officer, the petitioner preferred an appeal before the commissioner, jaipur, contending inter alia that the return for the year 1978-79 was filed voluntarily as on 7-11-1985 under amnesty scheme of 1985 and that the return was accepted by the income tax officer under section 143(3) of the act and that the assessee had fully cooperated with the assessing authorities with regard to the various enquiries made. as regard the assessee's request for wavier of the penalty and interest imposed upon it by the income tax officer, the commissioner jaipur vide his order dated 22-8-1989, rejected petitioner's contention and communicated the same on 23-12-1989, for the reason that since the assessee had failed to satisfy the conditions laid down in section 273a of the act as it wad not open to the petitioner to challenge the impugned order of the income tax officer. it is to be noted that besides confirming the demand of rs. 97,914 on the income of rs. 60,533 against the petitioner for the assessment year in question, prosecution was also launched against the petitioner by way of a complaint under section 276cc of the act, the petitioner having failed to furnish the return of income within the stipulated time, which he was required to furnish under section 139 of the act. section 276cc of the act provides as under :'276cc. if a person wilfully fails to furnish in due time the return of income which he is required to furnish under sub-section (1) of section 139 or by notice given under clause (1) of sub-section (1) of section 142 or section 148, he shall be punishable :(i) in a case where the amount of tax, would have been evaded if the failure had not been discovered, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine;(ii) in any other case, with imprisonment of a term which shall not be less than three months but which may extend to three years and with fine :provided that a person shall not be proceeded against under this section for failure to furnish in due time the return of income under sub-section (1) of section 139 :(i) for any assessment year commencing prior to the 1-4-1975; or(ii) for any assessment year commencing on or after the 1-4-1975, if(a) the return is furnished by him before the expiry of the assessment year; or(b) the tax payable by him on the total income determined on regular assessment, as reduced by the advance tax, if any, paid and any tax deducted at source, does not exceed three thousand rupees.'complaint was also preferred against the petitioner in the court of chief judicial magistrate (economic offences), jaipur of which a criminal case was registered vide case no. 373/86 of which the proceedings are still pending before the said court.2. during the course of hearing shri j.k. singhi learned counsel representing the revenue has vociferously contended that instead of participating in the proceedings by setting up a defence, if any, available to the petitioner before the competent court, i.e., cjm (eo), jaipur, the petitioner has come up by way of this writ petition challenging the assessment orders and also imposition of penalties as referred to hereinabove. learned counsel for the respondents, however contended that the proper course available to the petitioner was that he has first to exhaust the remedy available to him under the act instead of directly rushing to this court by way of filing the instant writ petition under article 226 of the constitution.3. learned counsel for the petitioner has contended that the commissioner, jaipur, whose order dated 22-8-1989, is under challenge in this petition, had totally discarded the provisions of section 273(a) of the act, which itself laid down that it is open to the commissioner to waive or reduce amount of penalty or waive the interest paid or payable under the various provisions of the act, if : (i) the return of income has been filed voluntarily by the assessee before the receipt of notice under section 139(2) of the act or under section 148 thereof; (ii) the tax has been paid under section 140a of the act before filing of return; (iii) the assessee has cooperated fully in the assessment proceedings; and (iv) the voluntary return has been filed in good faith declaring full particulars of share income as computed by the income tax officer.it is only under the above circumstances that the impugned order of the commissioner, which is under challenge in this writ petition, could be challenged in the event of failure to conform to any of the conditions as referred to above but not otherwise.4. it is pertinent to mention that return for the assessment year 1978-79 was filed by the petitioner belatedly on 7-11-1985, as per annexure-3 on the record, which is the order dated 31-1-1989, passed under section 271(1)(a) of the act by the income tax officer, ward 2(4), jaipur.a perusal of the said order reveals that the default notice was issued to the petitioner as per section 274 read with section 271(1)(a) of the act and served upon the assessee on 9-3-1987, calling upon him to show cause as to why penalty be not imposed in view of the default. opportunity was also afforded to the assessee of hearing as on 12-12-1988, but no reply was filed. thereafter the assessee had personally appeared before the income tax officer and had filed the return under the amnesty scheme, which came into existence on 15-11-1985, and that his case was fully covered by the circulars issued by the central board of direct taxes. the assessee was also given a show-cause notice on 12-12-1988, but no reply was received to the same.he has further contended that due to financial crunches he could not prepare the return for the assessment year in question and accordingly the return could not be filed within the statutory time allowed by the act.5. a perusal of the order dated 23-8-1989, passed by the commissioner, jaipur, reveals that the assessee did not fulfil the conditions necessary for deriving the benefit of section 273a of the act inasmuch as the demand created on assessment remains outstanding, therefore, the learned commissioner while passing the impugned order observed that there was no case on merit and had accordingly rejected the application for giving him the benefit as regards the waiver of the penalties.6. shri s.m. ali, learned counsel for the petitioner has contended that while passing the impugned order the commissioner had not taken into consideration that the penalty imposed on the petitioner far exceeds the amount which has due as per demand of rs. 97,914 on the income of rs. 60,533, is not tenable in the eye of law. he has further contended that the commissioner has also sanctioned prosecution of the petitioner and a complaint under section 276cc of the act has also been preferred against the petitioner before the cjm (eo), jaipur.7. be that as it may, i am of the view that the petitioner was not properly advised as regards filing of this writ petition challenging the order of the commissioner and instead he should have participated in the proceedings before the competent court viz., cjm (eo), jaipur, by setting up any defence as admissible to him in accordance with law.8. the learned commissioner vide communication dated 21-3-1991 (ann. 6), addressed to the petitioner, on petitioner's application under section 279(2) of the act, had given option as regards compounding of the offence under section 276cc of the act for the assessment year 1978-79 by depositing the penalty of rs. 99,871 towards the composition charges, in addition to the litigation expenses, if any, for which he was required to send a written communication under due intimation to the department but he failed to do so. it was left open to the petitioner to file return within fifteen days of receipt of the above. hence, i do not find any satisfactory explanation on the record as to whether the communication was at all complied with by the petitioner.it is further open to the petitioner that in case he wishes to contest the proceedings initiated against him before the cjm (eo), jaipur in criminal case no. 373/86, which i am informed is still pending, to set up any plausible defence, if any, as admissible to him as also to contest the prosecution launched against him under section 276cc of the act, in accordance to the law. he is also at liberty to take any other alternative remedy, in accordance with law.both the writ petitions stand disposed of accordingly.