Commissioner of Income Tax vs Dr. P.K.P. Mohammed

M. Jagannadha Rao, C.J.—This appeal is preferred by the Commissioner of Income Tax, Cochin, who was the second respondent in O. P. No. 4898 of 1989 (see Dr. P.K.P. Mohammed Vs. Central Board of Direct Taxes and Others, ) preferred by the respondent-writ petitioner. The said writ petition was allowed by the learned single judge by judgment dated June 11, 1993. The following are the facts.

The respondent-writ petitioner is an assessee on the file of the Income Tax Officer, A-Ward, Cannanore. While completing the regular assessment for the assessment years 1978-79 to 1981-82, the Income Tax Officer levied interest u/s 139(8) and Section 217 of the Income Tax Act, 1961. The writ petitioner then filed a petition u/s 273A of the Act before the Commissioner of Income Tax, Cochin (appellant herein) for waiver of the interest levied for the above assessment years. By an order dated July 22, 1985, exhibit P-l, the appellant waived interest under both the sections in exercise of powers under one of the sub-clauses of Section 273A(1). This was done because of the fact that the assessee had, before issue of a notice, voluntarily filed returns of income disclosing true income and had paid tax.

Subsequently, the Income Tax Officer issued notice of proceedings for imposition of penalty under Sections 271(1)(a) and 273(2)(b). On receipt of the notice, respondent-writ petitioner submitted exhibit P-2 petition dated March 20, 1986, praying for waiver of penalty imposed under the above-said sections. That petition was rejected by the Commissioner of income tax--appellant by exhibit P-3 order dated August 3, 1987, on the ground that he had already exercised powers under Clause (iii) of Section 273A(1) of the Act, when he had waived interest and that once such a power was exercised, the assessee could not seek any relief under any of the clauses of Section 273A(1). Aggrieved by the said order, the assessee-writ petitioner filed the present writ petition, O. P. No. 4898 of 1989 (see Dr. P.K.P. Mohammed Vs. Central Board of Direct Taxes and Others, ) and the learned single judge allowed the writ petition holding, by an elaborate judgment, that the exercise of powers u/s 273A(1)(iii) did not preclude exercise of powers subsequently u/s 273A(1)(i) or (ii) of the Act. It is against the said judgment that this appeal has been preferred by the Commissioner of Income Tax, Cochin.

The learned single judge has relied upon the provisions of Section 14 of the General Clauses Act to say that the powers conferred under any provision has to be exercised from time to time. Even apart from the said reasoning given by the learned single judge, we fail to see how exercise of power under one clause of Section 273A(1) would come in the way of exercise of powers under the other clauses of Section 273A(1).

The learned single judge distinguished the decision of the Allahabad High Court in Ram Sarandas Har Swaroop Mal and Another Vs. Commissioner of Income Tax and Another, . As pointed out by the learned single judge, the facts and the points which arose in that case are quite different from the present case. The following are what the learned single judge observed in paragraph 9 of his judgment (at page 486 of 203 ITR) :

"It is true that, while construing the provisions in Sub-section (3) of Section 273A of the Act, B.P. Jeevan Reddy C. J. (as his Lordship then was), on behalf of the Division Bench, has observed that (at page 506 of 186 ITR) : ''The true meaning of Sub-section (3) is that the power shall be exercised only once in the case of a given person and not more than once''. The above observation apparently supports fully the contention of the first respondent and as such deserves detailed consideration in the light of the facts and circumstances of the case and the contentions raised by learned counsel for the petitioner. The relevant observations were made in a case where the Income Tax Officer had levied the interest u/s 139(8) on the assessee for late filing of returns and also imposed penalties u/s 271(1)(a) of the Act for the assessment years commencing from 1978-79 and ending with 1981-82. The assessee in that case filed an application before the Commissioner for waiver of interest and penalties u/s 273A(1). The Commissioner waived the penalty only for the assessment year 1977-78 and dismissed the application in all other respects on the ground that under Sub-section (3) of Section 273A, the indulgence granted once was not available for any other assessment year nor for a second time for the same assessment year. The Division Bench found that the view taken by the Commissioner is unsustainable and set aside the order and remanded the matter for fresh consideration in accordance with law and in the light of the observations and directions contained in the judgment. From the facts of the case, it is clear that it is a case where the court was not called upon to consider the question of maintainability of the application for the exercise of the powers conferred u/s 273A(1) of the Act for a second time. There was also no specific contention raised regarding the exact scope of the power conferred u/s 273A(1) of the Act. The question whether the exercise of power in relation to only one of the several matters mentioned in the three clauses with reference to which power was conferred by the sub-section would amount to an exercise of power in relation to all the matters provided under all the clauses and would exhaust the entire power vested under the subsection was not a matter specifically considered in the said decision. It was a case where the Commissioner exercised his power only with reference to one year even though the assessee had claimed even at the first instance relief in respect of the four years. That was obviously against the express words contained in the section and was clearly illegal. It was in this context that the Division Bench has made the above observation."

We, therefore, entirely agree with the view expressed by the learned single judge and dismiss this appeal.

Learned counsel for the appellant has made an oral application for a certificate to appeal to the Supreme Court under Articles 133 and 134A of the Constitution of India. We do not think that any substantial question of law of general importance is involved in this case which, in our opinion, needs to be decided by the Supreme Court.

The oral application is rejected.