Kalindi Investment (Pvt.) Ltd. vs Commissioner of Income Tax, Gujarat-I

Divan, C.J.—Mr. R. P. Bhatt, who appears for the respondents, waives service, Mr. Bhatt further says that, in view of the facts in this case,

the matter may be decided on the statements made in the petition. It is clear that the first respondent, Commissioner of Income Tax, purported to

exercise his power under s. 273A of the I.T. Act. The only question that was before him was to consider whether the conditions of clause (c) of s.

273A(1) were satisfied or not. We are not concerned in this case with waiver or reduction or any other clause except clause (8) of s. 139. Section

273A(1)(iii) gives power to the Commissioner, notwithstanding anything contained in the Act, whether on his own motion or otherwise, to reduce

or waive the amount of interest paid or payable under sub-s. (8) of s. 139, and under clause (c), in cases referred to in clause (iii), the

Commissioner has to be satisfied that such person has, prior to the issue of a notice to him under sub-s. (2) of s. 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 s. 148, voluntarily and in good faith

made full and true disclosure of his income and has paid the tax on the amount so disclosed. under r. 117A, power vests in the ITO, subject to the

prior approval of the IAC, under certain circumstances to reduce or waive interest in any of the cases falling under s. 139 and not merely under

sub-s. (8) of s. 139. These powers conferred on the Commissioner under s. 273A and on the ITO under r. 117A are totally different. In the

present case, we find that the order passed by the Commissioner that he has considered whether tax planning could be said to be a sufficient cause

for the delay in filing the return or, whether tax planning could be said to be sufficient cause to justify a waiver of reduction. It is obvious that the

question of sufficient cause arises under r. 117A and not under s. 273A. It was for the ITO concerned under r. 117A to find out whether there

was sufficient cause for the delay in filing the return of income and, if he was so satisfied, to reduce or waive the amount of interest payable under s.

139(8). However, the question of sufficient cause does not arise for consideration in a case under s. 273A(1)(iii). Under these circumstances, it is

obvious that the decision of the Commissioner has been, at least in part, swayed by an extraneous consideration, i.e., extraneous to what he had to

consider under clause (c) of S. 273A(1). Under these circumstances, this special civil application is allowed and the order, annex.""F"" to the

petition, being the order dated April 27, 1978, passed by the first respondent, is quashed and set aside. under the circumstances, the

Commissioner is directed to take up for reconsideration the petitioner''s application under s, 273A and to determine it afresh in accordance with

law and in the light of the observations made in this judgment. Rule is made accordingly absolute. The Commissioner will pay the costs of this

petition to the petitioner.

Application allowed.