Saberaj Industries vs F.J. Bahadur, Commissioner of Income Tax

S.H. Kapadia, J.—Being aggrieved by order dated 28-1-1987 passed by the Commissioner rejecting petitioners'' application u/s 273A of the income tax Act, 1961 (''the Act'') for waiver of interest and penalty in respect of the assessment years 1978-79 to 1982-83, the present writ petition has been filed. Facts giving rise to this petition briefly are as follows:

On 15-11-1985, the petitioners filed returns of income for eight years in respect of the assessment years 1978-79 to 1985-86. According to the petitioners, they filed the above returns of income for eight years disclosing voluntarily their true income and also paid self-assessment tax thereon. However, the said returns for the first five years out of eight years, i.e., for the assessment years 1978-79 up to 1982-83 were filed beyond time. On 22-1-1986 and on 30-1-1986, notices u/s 148 of the Act came to be issued in respect of the above-mentioned first five years. By letters dated 28-1-1986 and 31-1-1986, petitioners informed the ITO that they were in receipt of notices u/s 148; that they have filed returns for eight assessment years on 15-11-1985 and in the circumstances, the petitioners requested the ITO to treat the said returns as filed in compliance with the notice u/s 148. The assessment for the relevant assessment years came to be completed u/s 143(1) of the Act on 3-9-1986. Therefore, the petitioners applied on 19-11-1985 for waiver of interest and penalty imposed by the ITO at the time of assessment. By impugned order, the said application is rejected by the Commissioner on the ground that the returns of the above five years were beyond time limit as prescribed under the Act and, therefore, the returns were treated as non est in the eyes of law. Accordingly, petitioners'' claim for first five years for waiver was rejected. However, for the last three years, viz., assessment years 1983-84 up to 1985-86, the Commissioner waived the interest and penalty and directed the ITO to carry out his directions. Being aggrieved by the order of rejection in respect of the first five assessment years, the present writ petition has been filed. Shri Bhujale, the learned counsel for the petitioners, contended that in the instant case, returns were filed on 15-11-1985 whereas notices u/s 148 were issued in January 1986 and, therefore, the petitioners had filed their returns and had disclosed full and true income voluntarily and in good faith prior to notice issued u/s 139(2) or section 148 of the Act was and, therefore, the petitioners had complied with all the conditions u/s 273A. Shri Bhujale further contended that the Commissioner had erred in coming to the conclusion that the returns were filed in pursuance of notice u/s 148. Shri Bhujale contended that the Commissioner erred in coming to the conclusion that the returns filed by the petitioners in 1985 did not fall under sections 139(1), 139(3) and 139(4) of the Act and, therefore, the said returns were no returns in the eyes of law.

The basic question involved in the present case is whether the petitioners had filed their returns, before notice u/s 148 was issued. Petitioners have solemnly affirmed in the petition that they filed their returns much prior to issuance of notice u/s 148 in January 1986. However, in the present case, we find that by letters dated 28-1-1986 and 31-1-1986 the petitioners informed the ITO that they were in receipt of notice u/s 148 and that the petitioners requested the ITO to treat their returns filed on 15-11-1985 as returns filed in compliance with notice u/s 148. This clearly shows two things, firstly, that returns filed on 15-11-1985 in respect of the assessment years 1978-79 up to 1982-83 were filed beyond the time limit prescribed. Secondly, the letters dated 28-1-1986 and 31-1-1986 addressed by the petitioners to the ITO indicate that the petitioners purported to file returns after notice u/s 148. Shri Bhujale contended that the above two letters dated 28-1-1986 and 31-1-1986 only indicate that returns were filed on 15-11-1985, ie., prior to notice u/s 148. There is no merit in the said contention. The above two letters dated 28-1-1986 and 31-1-1986 indicate clearly that the petitioners purported to request the ITO to treat the returns which were time-barred to be treated as returns in compliance with section 148. In the above circumstances, the pre-conditions laid down by section 273A are not fulfilled. In the above circumstances, it is not necessary for this Court to go into larger issues raised by the petitioners in the petition. One more aspect may be mentioned that the Commissioner has given a finding of fact that only the returns for the last three assessment years out of eight assessment years are true and complete. This is essentially a finding of fact. In the circumstances, we do not wish to interfere under article 226 of the Constitution. Accordingly, writ petition fails, rule is discharged with costs.