Udayam Constructions vs Commissioner of Income Tax and Another

S.K. Krishnan, J.—By consent of both parties, the main writ petition itself is taken up for final disposal.

The prayer in the writ petition is to call for the records of the first respondent in C. No. 7144/(35)/CIT-II/TRY/2004-05 dated August 16,

2005, and the connected proceedings of the second respondent in G.I. No. 319U/2000-01 dated March 23, 2004, and quash same as illegal,

arbitrary and against the provisions of the Income Tax Act and consequently direct the second respondent herein to accept the income reported by

the petitioner.

This writ petition is being preferred by the petitioner, who is an Income Tax assessee and filed a return before the second respondent for the

assessment year 2000-01. The said return was filed by the petitioner herein before the second respondent on December 15, 2000. It is an

admitted fact that at the time of filing of the said return before the second respondent, the petitioner herein did not enclose the audit report. It is

stated that the petitioner is receiving income less than 8 per cent. The second respondent, on receipt of the return from the petitioner, passed an

order, accepting the return and refunded a sum of Rs. 53,274. However, the second respondent suo motu taken up revision and cancelled the

earlier order dated March 23, 2004, passed by him. In the subsequent order passed by the second respondent, the petitioner was directed to pay

a sum of Rs. 82,516. Aggrieved against the order passed by the second respondent, the petitioner herein filed the revision before the first

respondent. It is stated that the first respondent also without considering the reasons stated by the petitioner, confirmed the order passed by the

second respondent. The said order was passed on August 16, 2005. Aggrieved against the same, the petitioner approached this Court and field

this writ petition.

The only point to be decided in this case is whether any directions are to be issued to the respondent to comply with the penalty provisions u/s

271B of the Income Tax Act.

When this petition is taken up for hearing, learned Counsel appearing for the petitioner would submit that even though he has failed to enclose

the audit report at the time of submitting his return before the first respondent, he submitted the audit report subsequently before the second

respondent. Instead of considering the petitioner''s claim, imposed the penalty u/s 271B of the Income Tax Act and the respondents rejected the

claim of the petitioner. Therefore, the order passed by respondents Nos. 1 and 2 is not at all legally sustainable. Therefore, the said order is liable

to be set aside. It is emphasized that instead of considering the audit report submitted by the petitioner before the authorities, the authorities

imposed the penalty. Therefore, counsel would submit that the order passed by respondents Nos. 1 and 2 is liable to be set aside and a direction

may be issued to respondents Nos. 1 and 2 to comply with the provisions u/s 271B of the Income Tax Act.

Heard learned Counsel appearing for the petitioner as well as the learned Counsel appearing for the respondents.

On a careful consideration of the reasons stated by learned Counsel appearing for the petitioner and also considering the facts and

circumstances of the case, this Court set aside the order passed by respondents Nos. 1 and 2. Consequently, the respondents are directed to

comply with the provisions u/s 271B of the Income Tax Act.

With the above terms and conditions, this writ petition is allowed. Consequently, the connected miscellaneous petitions are closed. No costs.