TMI Blog2018 (3) TMI 230X X X X Extracts X X X X X X X X Extracts X X X X ..... . No. 1918/2018 & W. P. No. 1922/2018 - - - Dated:- 1-3-2018 - Hon'ble Shri P. K. Jaiswal And Hon'ble Shri Virender Singh, JJ. Shri P.M. Choudhary, learned Senior counsel with Shri A.K. Jain, Advocate for the petitioner Ms. Veena Mandlik, Advocate for the respondent ORDER Per P. K. Jaiswal, J. Since a common question of law is involved in these petitions therefore, they are being heard together and are being disposed of by this common order. For the sake of convenience the facts are borrowed from W.P.No.1918/2018. 2. By these writ petitions under Article 226 of the Constitution of India, the petitioner assessee is assailing the order dated 15.12.2017 (Annexure P/1), passed by the Principal Commissioner Income Tax I, Indore whereby, he has rejected the application filed by the petitioner under Section 273(A) / 273(A)(4) of the Income Tax Act, 1961, (hereinafter referred as 'the Act'), for waiver of penalty imposable under Section 271(1)(c) of the Act. 3. The facts of the case are that the petitioner is proprietor of M/s. Khandelwal Chemicals, engaged in the business of manufacture and sale of chemicals. He is also the partner in part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year, this profit was claimed u/s 10(38) I.T. Act, 1961 in his return of income. During the course of assessment proceedings assessee withdrew his deduction u/s 10(38) I.T. Act, 1961 and offered the income under the head income from other sources. Assessee did not surrendered capital gain of ₹ 10,58,646/- himself. He withdrew dudction of ₹ 13,58,646/- u/s 10(38) I.T. Act after detection by department. Therefore, the total amount of ₹ 13,58,646/- is added to his return income under the head income from other sources. Penalty proceedings u/s 27(1)(c) are also initiated for furnishing inaccurate particulars. 6. Assessed u/s. 143(3) of the Income-tax Act and interest are determined as per the ITNS-150 which is a part of this assessment order. Demand Notice and Challan are issued accordingly. Penalty proceedings u/s 271(1)(c) of I.T. Act, 1961 is initiated. 8. On 27.12.2016, the petitioner filed a petition before the Principal Commissioner of Income Tax I, for waiver of penalty leaviable u/s 271(1)(c) of the Income Tax Act and in para 6 he has submitted that he has fulfilled following condition for waiving of leviable penalty :- a. The assessee has pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars by the assessee and (ii) The assessee has co-operated in any enquiry relating to the assessment of his income and (iii) The Assessee has either paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passes under this act in respect of the relevant assessment year. 12. The Principal Commissioner after examining the record of the case found that the condition prescribed for waiver of penalty u/s.273A is not fulfilled by the assessee in respect of assessment year 2014-15, as the income of the assessee selected for scrutiny under CASS for the reason of suspicious long term capital gain on share (Input from investigation wing). The Assessing Office was in possession of detailed and specific information on which he had written a letter to the petitioner on 26.7.2016, whereas the assessee submitted his revised computation and accepted LTCG under the head 'Income From Other Sources' vide his letter dated 16.8.2016 and these facts the assessing officer has mentioned in assessment order and penalty order u/s 27(1)(c) of the Act in para 4 and 6 of the order. 13. The condition for waiver of penalty in Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly or in any manner. The learned Principal Commissioner also found that the petitioner could not produce any document / evidence of genuine hardship for waiver of penalty u/s. 273(A)(4) nor specific requirement of section. The petitioner is the author of the situation. 18. He claimed long term capital deduction u/s. 10(38) of ₹ 13,58,846/- on account of Transfer of Eligible Equity Share and after Input from the investigation Wing , the case was selected for scrutiny and thereafter only after receipt of letter dated 26.10.2017, the assessee withdrawn the deduction claimed u/s 10(38) and accepted as Income From Other Sources . 19. In the case of Vasantbhai Jethalal Lathiwala V/s. Commissioner of Income-tax, (2008) 174 Taxman 280 (Bombay), it has been held that the power u/s. 273A of the Act is purely discretionary character and once the conditions required for exercise of discretion in any judicial or quasi- judicial proceedings are satisfied, exercise of discretion cannot be either arbitrary or capricious and has to be judicious and objective. He has placed reliance on the decision of the Bombay High court in the case of Laxman V/s Commissioner of Income-tax, (1988) 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so provided to the Commissioner to levy penalty and reduce interest needs to be exercised judiciously, fairly, reasonably, objectively and not arbitrarily. The order of the Commissioner was quashed and it was directed to consider the application in accordance with law, on merits. The facts of Vasantbhai Jethalal Lathiwala V/s. Commissioner of Income-tax and Commissiner of Income- tax (supra) are distinguishable on facts. 22. The respondent has drawn our attention to the decisions of the Allahabad High court in the case of Jyoti Steels V/s. Commissioner of Income-Tax Another, 1987 (166) ITR 558, Hakam Singh Others V/s. Commissioner of Income-Tax, Meerut, 1980 (ITR) 124 Pg. 228 (All.) and Mool Chand Mahesh Chand V/s. Commissioner of Income-Tax, Agra Another, 1978 (ITR) Vol.115 Pg.1 (All.) and submitted that the order dated 15.12.2017 passed by the Principal Commissioner Income Tax-1, is just and proper and prayed for dismissal of the petition. 23. In order to avail of the benefit of Section 273A of the Act, it is for the petitioner to make out a case that imposition of penalty would cause genuine hardship to him and this to be done to the satisfaction of the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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