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TMI Blog2011 (3) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... n 271(1)(c) of the Act and also the order of the Chief CIT, Bareilly dated 28-3-2006 which had been communicated by the office of the Chief CIT, Bareilly vide letter dated 24-3-2006, by which he had refused to grant approval as contemplated Apnder section 273A(2)(b) of the Act. 3. Learned counsel for the petitioner submitted that the CIT, Moradabad had rejected the waiver application merely on the ground that the Chief CIT, Bareilly had refused to grant approval vide its order dated 28-3-2006. He further submitted that the Chief CIT, Bareilly had refused to grant approval merely on the ground that the revised return was not voluntary, without considering the report of the ITO in which he had stated that the assessee made the disclosure vol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in this Act, the CIT may, in his discretion, whether on his own motion or otherwise,- (i) ** ** ** (ii) reduce or waive the amount of penalty imposed or imposable on a person under clause (iii) of sub-section (1) of section 271; or (iii) ** ** ** if he is satisfied that such person- (a) ** ** ** (b) in the case referred to in clause (ii), has, prior to the detection by the Assessing Officer, of the concealment of particulars of income or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, made full and true disclosure of such particulars, (c) &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purposes of convenience. Finding of CIT "In view of the Assessing Officer's report and considering the facts of the case as also keeping in view the amount involved being more than Rs. 5 lakhs, the case was referred to the Chief CIT, Bareilly seeking approval for waiver as per the provisions of sub-section (2) of section 273A of the IT Act, 1961. The learned Chief CIT, vide his letter F. No. T.10/Misc./CC/Bly/2005-06, dated 28-3-2006, has observed that this is not a fit case for the waiver of penalty under section 273A. Hence the application is hereby rejected." Extract of this letter dated 24th May, 2006 "In this connection, I am directed to inform you that no specific order has been passed by the worthy Chief CIT, Bareilly. How ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Chief CIT proposes to grant approval for waiver, no opportunity is required to be given to the assessee but in case he proposes to refuse the approval, the principle of natural justice is to be observed and the opportunity to the assessee should be given as it adversely affects the right of the assessee and assessee suffers from civil consequences. We are further of the view that power under section 273A(2)(b) of the Act should not be exercised mechanically. Requirement to take the approval in case amount exceeds rupees five lakhs is to monitor the proper exercise of power of CIT therefore, for granting the approval or for refusal of approval the reasons should be recorded and there should be an application of mind. 9. A similar situat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d have been passed, and since such an opportunity was not given, the order of approval granted by the higher authority was quashed." 10. The same view has been taken by this Court in the case of Olympic Zippers (P.) Ltd. v. CIT 2007 UPTC 146 (All.) and in a recent decision of this Court in the case of S.K. Traders (supra). 11. In the case of Rajesh Kumar (supra), the Apex Court was considering the provisions of section 142(2A) of the Act which empowers the Assessing Officer, after obtaining the approval of the CIT to direct for special audit of the books of account of the assessee. The provisions of section 142(2A) of the Act do not provide for giving of any opportunity of hearing by the CIT to the assessee. The Apex Court has held as fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re if the principles of natural justice are required to be complied with, the same by itself would not mean that the Court would not insist on complying with the fundamental principles of law. If the principles of natural justice are to be excluded, the Parliament could have said so expressly. The hearing given is only in terms of section 142(3) which is limited only to the findings of the special auditor. The order of assessment would be based upon the findings of the special auditor subject of course to its acceptance by the Assessing Officer. Even at that stage the assessee cannot put forward a case that power under section 142(2A) of the Act had wrongly been exercised and he has unnecessarily been saddled with a heavy expenditure. An ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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