TMI Blog2004 (1) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that the petitioner has proved his case, in both the capacities under section 273A - - - - - Dated:- 7-1-2004 - Judge(s) : V. C. DAGA., J. P. DEVADHAR. JUDGMENT The judgment of the court was delivered by V.C. DAGA J. - These petitions involving a short question of law and fact were taken up for hearing together and are being disposed of by this common judgment. Background facts: The admitted facts giving rise to both these petitions in a nutshell are that Shri S.S. Bhagwat became the karta of the joint Hindu family on the death of his father the late Shri S.K. Bhagwat, who left for heavenly abode on November 23, 1980. The joint family had been assessed to income-tax right from the assessment year 1961-62 till the assessment year 1980-81. All the tax matters having been attended to by the late father of the petitioner; who was the karta of the family, and the petitioner being abroad in the U.S.A. was not familiar with any of the affairs of the family, consequently, the returns of the income of the family for the assessment years 1981-82 to 1987-88 remained to be filed on due dates after the death of the father of the petitioner. Even returns in the status of individ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idering the issues in the light of the case law cited. However, the said applications also came to be rejected vide letter dated August 8, 1991. The aforesaid orders which are more or less based on the similar law and facts are the subject matter of challenge in both these petitions filed under articles 226 and 227 of the Constitution of India. Submissions: In these petitions, it is contended that the discretion conferred under section 273A has not been properly exercised by the Commissioner of Income-tax keeping in view the settled legal position. It is further contended that it is not in dispute that the returns were filed suo motu and the same were accepted and that the petitioner has fully paid the taxes on the returned income and that he co-operated in the assessment proceedings. On this premise, the petitioner seeks to impugn the orders passed by the Commissioner/respondent herein. The respondents herein have filed a counter affidavit to support the impugned orders and opposed these petitions. It is submitted that the Commissioner has acted in accordance with law and exercised his discretion properly and that the petitions are devoid of any merit. Mr. Inamdar, learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished in respect of such income, voluntarily and in good faith, made full and true disclosure of such particulars; (c) in the cases referred to in clause (iii), has, prior to the issue of a notice to him under sub-section (2) of section 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 section 148, voluntarily and in good faith made full and true disclosure of his income and has paid the tax on the income so disclosed, and also has, in all the cases referred to in clauses (a), (b) and (c), co-operated in any enquiry relating to the assessment of his income and has either paid or made satisfactory arrangements for the payment of any tax, or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year. Explanation. -For the purposes of this sub-section, a person shall be deemed to have made full and true disclosure of his income or of the particulars relating thereto in any case where the excess of income assessed over the income returned is of such a nature as not to attract the provisions of clause (c) of sub-section (1) of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vious approval of the Board. (5) Every order made under this section shall be final and shall not be called into question by any court or any other authority." It is plain that in view of the absence of initiation of penalty proceedings for concealment of income under section 271(1)(c), clause (b) of sub-section (1) of section 273A is not attracted in this matter, and that the word "detection" is to be found only in clause (b) and not in the relevant clauses (a) and (c). Dissection of the above provisions would spell out the condition precedent for exercise of discretion to waive the penalty or interest under section 273A of the Act, which can be catalogued as under: (a) voluntary disclosure of income before issuance of notice under section 139(2); (b) making of full and true disclosure of the income in good faith; (c) co-operation in the conduct of income-tax assessment proceedings; (d) payment or satisfactory arrangement for payment of tax or interest payable in consequence of an order passed with respect to the relevant assessment year. The issue: Undisputedly, there is no grievance about non-fulfilment of the above conditions of the section. In the above backd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. With the aforesaid understanding of law, let us turn to the submissions advanced by Mr. Desai on behalf of the Revenue. If one has to test the submissions made on the touchstone of the above law laid down by this court, then the submissions advanced by Mr. Desai run counter to the law laid down by this court. In our opinion, the Division Bench of this court has rightly ruled that good faith is to be seen with respect to the disclosure of income and not with respect to the period anterior to the filing of the return. If that be so, it is not in dispute that the returns were voluntarily filed by the petitioner/assessee before issuance of notice under section 139(2) or even before receipt of any notice or intimation from the Income-tax Department. It is also not in dispute that full and true disclosures of income in good faith were made by the petitioner and that those returns were accepted under sections 143(1) and 143(3) of the Act. It is not the case of the respondents that where the returns are accepted under section 143, the petitioner has not co-operated with the Department. There was no question of co-operating with the Department where the returns were accepted wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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