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Judgment
Vikram Nath, J.—The relevant facts giving rise to the filing of this writ petition are that the petitioner had won a lottery of Rs. 2,00,000, result of which was declared on 22nd Jan., 1992, under the scheme "Sahara Golden Key" run by the Sahara India. The prize money was paid to the petitioner in February, 1992, i.e., before 31st March, 1992, which would mean the financial year 1991-92 and the asst. yr. 1992-93. The petitioner in her return for the asst. yr. 1992-93 disclosed the receipt of the prize money and also paid the tax due on it. The assessment order for the asst. yr. 1992-93 was passed on 20th March, 2002.
It appears that the AO, on some misconception thought that as the petitioner has won the lottery in January, 1992, the receipt of the prize money would form part of the asst. yr. 1991-92. The assessing authority passed ex parte assessment order for the asst. yr. 1991-92 and included the amount of prize money won by the petitioner in the lottery result dt. 22nd Jan., 1992, and accordingly, raised the demand, vide order dt. 3rd Feb., 1999. The assessing authority further passed an ex parte penalty order on 30th Aug., 1999, u/s 271(1)(c) of the IT Act, 1961 (hereinafter referred to as "the Act"), for the asst. yr. 1991-92 on the ground of concealment of the income received by the petitioner on account of winning the lottery.
There is no dispute with regard to the assessment order for the asst. yr. 1992-93, which was the relevant assessment year in which the lottery had been won and the prize money was received by the petitioner and duly disclosed in her return. However, with regard to the ex parte assessment order and the ex parte penalty order for the asst. yr. 1991-92, the petitioner, as she was not duly served by the assessment and penalty orders, could not take recourse of filing appeal in time. However, she filed two revisions before the CIT u/s 264 of the Act. Both these revisions were dismissed by the CIT on the ground of delay vide order dt. 28th March, 2002. Subsequently, the petitioner filed an application u/s 154 of the Act for rectification of the mistake in the order of the CIT but the same was also rejected. It is against these orders the present writ petition has been filed.
Heard Sri S.D. Singh, learned Counsel for the petitioner, and Sri A.N. Mahajan, learned standing counsel representing the Department of IT.
From a perusal of the order passed by the CIT dismissing the revision relating to penalty on the ground of delay, it is apparent that according to the CIT limitation for filing the revision was expiring on 30th Aug., 2000, whereas the revision was filed on 8th''Nov., 2000. The delay would be approx. 70 days according to the CIT. However, the CIT in his order has failed to consider the statement of the petitioner that the assessment order and the penalty order were never served upon her and it was only when recovery proceedings were initiated she acquired knowledge of these orders. There is no discussion with regard to the stand of the petitioner regarding non-service of the order. Further, from a perusal of the CIT''s order it appears that the penalty order which is dt. 30th Aug., 1999, was served on the same day on the petitioner through registered post. This cannot be accepted. An order passed on a particular date would be despatched on the same day by the Department, then registered with post office on the same day and delivered to the addressee on the same day is quite unbelievable and almost an impossibility.
With regard to the revision arising out of the ex parte assessment order the CIT has recorded that the assessment order was served on the petitioner on 15th April, 1999, the limitation was to expire on 15th April, 2000, and the revision was filed on 8th Nov., 2000, i.e., after the delay of almost seven months. The CIT has again failed to consider the contention of the petitioner that she had not been served with the assessment order. No finding has been recorded as to how service was effected.
Coming to the merits of the case, it may be noticed that the petitioner has made specific statement in para Nos. 6 and 7 of the petition that the prize money has been received by an account payee cheque dt. 22nd Jan., 1992, and credited to her account in the month of February, 1992. Further, in para No. 8 the petitioner has specifically averred that she had not earned any income whatsoever, what to say of the prize money in the previous year 1991-92. The Department in its reply to para No. 6 of the writ petition, has admitted in para No. 7 of the counter-affidavit that the prize money related to the accounting year 1991-92, asst. yr. 1992-93 and not to the asst. yr. 1991-92.
The facts as stated in para Nos. 6, 7 and 8 of the writ petition and the reply as given in para Nos. 7, 8, 9 of the counter-affidavit are reproduced herein under:
That, the lottery operator, Sahara India paid the prize money of Rs. 2,00,000 to the petitioner through account payee cheque No. 140932, dt. 22nd Jan., 1992, for Rs. 1,76,000 only. The balance of Rs. 24,000 was deducted as payment of tax at source.
That, the petitioner deposited the above cheque for prize money in her savings bank account No. 14371 in Union Bank of India. The cheque was encashed and the amount credited to her account in February, 1992, A photocopy of her bank statement containing the entry of deposit of Rs. 1,76,000 in February, 1992, is hereby marked and annexed as Annex.-I to this writ petition.
That, during the asst. yr. 1991-92 the petitioner had not earned any income and was assessable to tax under the IT Act, 1961, hereinafter referred to as "the Act". Therefore, she was neither required to file her return of income for the year 1991-92 and she did not file such return.
Paras 7, 8, 9 of the counter-affidavit:
That, in reply to the contents of para No. 6 of the writ petition it is clarified that on the basis of Form No. 16A which is a certificate of deduction of tax at source issued by the Sahara India Ltd., it appeared that the prize money of Rs. 2,00,000 related to the accounting year 1991-92, i.e., relevant to the asst. yr. 1992-93, and not to the asst. yr. 1991-92. Under these circumstances, the ITO again recorded the reasons as required u/s 149(2) of the Act that the income of the petitioner has escaped assessment and after receiving the approval from the Addl. CIT, a notice u/s 148 in respect of the asst. yr. 1992-93 was issued to tax the prize money of Rs. 2,00,000 received by the petitioner.
That the contents of para No. 7 of the writ petition need no reply being matter of record.
That, in reply to the contents of para No. 8 of the writ petition it is submitted that despite the issue of notice u/s 148 in respect of the asst. yr. 1991-92 no return was ever filed despite the fact that the notice dt. 20th Sept., 1994, was served on the husband of the petitioner Dr. C.M. Mishra on 24th Jan., 1997.
From the above it is apparent that the Department has admitted the receiving of the prize money in the asst. yr. 1992-93 which the petitioner had disclosed in her return and also paid the tax. The assessing authority has thus, apparently committed an error apparent on the face of the record while making the ex parte assessment and the penalty order for the asst. yr. 1991-92. In case the CIT hearing the revision had looked into the merits of the matter also which was neither very complicated nor lengthy but based upon simple admitted facts, probably the order of dismissing the revision on the ground of delay may not have been passed.
It is well-settled that no party gains any advantage by causing delay. If the party approaching the authority or the Court beyond the prescribed limitation does not indicate any motive or any advantage, the authority or the Court must condone the delay and proceed to decide the matter on the merits.
In the present case, delay was not very substantial but only of a few months. It was an open and shut case. In my opinion, the CIT committed an error in dismissing the revisions on the ground of delay.
Normally, in such a matter where the revisional authority has not decided the matter on the merits, it would be appropriate to remit the matter to such authority to decide the matter on the merits, but in view of the facts stated above and in view of the admitted case in the counter-affidavit the ex parte assessment and penalty proceedings for the asst. yr. 1991-92 cannot be sustained. Further, as there has been no intention of either avoiding or evading payment of tax by the petitioner no purpose will be served by remanding the matter for a fresh round of litigation to the revisional authority. Therefore, this Court in writ jurisdiction having ample power for correcting an illegality apparent on the face of the record is finally adjudicating the issue which has come before it in the writ jurisdiction.
Accordingly, this writ petition succeeds and is allowed. The order of the CIT dismissing the revision u/s 264 of the Act against the ex parte assessment order and also against the ex parte penalty order are quashed and further the ex parte assessment order dt. 3rd Feb., 1999, and ex parte order of penalty dt. 30th Aug., 1999, relating to the asst. yr. 1991-92 passed against the petitioner are also quashed.
There shall, however, be no order as to costs.