TMI Blog1995 (2) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... s 1985-86 and 1986-87 showing agricultural income and income other than from agriculture and, an April 16, 1987, the Income-tax Officer passed the assessment orders under section 143(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), accepting the income as shown in their respective returns for the aforementioned years. It appears that some enquiry was later initiated against them and anticipating the result of the enquiry against them both the petitioners, who are father and son, submitted revised returns for the aforementioned assessment years. On March 29, 1988, the petitioner of Writ Petition No. 3927 of 1989 reduced the agricultural income from Rs. 1,38,250 to Rs. 1,10,000 and enhanced the income other than from agriculture from Rs. 33,770 to Rs. 62,020 in respect of the assessment year 1985-86. He reduced the agricultural income from Rs. 2,79,920 to Rs. 1,40,000 and enhanced the income other than from agriculture from Rs. 56,200 to Rs. 1,96,120 for the assessment year 1986-87. Notice under section 148 of the Act was issued to regularise the revised returns and the incomes returned as per the revised returns were found to be in order and were accepted. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 1/45 of 1988-89, dated October 27, 1988, though holding that the petitioner has satisfied a portion of the conditions required for waiver, concluded that the disclosure made by him cannot be considered as full, true and in good faith since the revised returns were filed showing additional incomes after the petitioner was aware of the fact of the enquiries made by the Department and, therefore, rejected the application of the petitioner in Writ Petition No. 3936 of 1989. The petitioners have challenged the impugned orders through the aforementioned separate writ petitions alleging that the returns were filed by them voluntarily and in good faith making a full and true disclosure of their incomes and had fully co-operated with the Department, and had paid the entire taxes on incomes assessed by the Income-tax Officer and, therefore, the respondent-Commissioner of Income-tax should have accepted their respective applications for waiver of the whole amount of interest levied on them. The impugned orders are arbitrary amounting to failure to exercise the discretion vested in the respondent by law and, therefore, the writ as prayed for may be issued. The respondent did not file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aive the amount of penalty imposed or imposable on a person under clause (iii) of sub-section (1) of section 271 ; or (iii) reduce or waive the amount of interest paid or payable under sub-section (8) of section 139 or section 215 or section 217 or the penalty imposed or imposable under section 273, if he is satisfied that such person,-- (a) in the case referred to in clause (i), has, prior to the issue of a notice to him under sub-section (2) of section 139, voluntarily and in good faith made full and true disclosure of his income ; (b) in the case referred to in clause (ii), has, prior to the detection by the Income-tax 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) 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 incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer in completing the assessments and have paid the taxes. In K. Ramulu and Bros. v. CIT [1990] 185 ITR 517 (AP), it is held that when the revised returns furnished by the assessee are accepted in full without any further addition, it should be treated as honest disclosure made by the assessee and merely by failure to mention the full income in the original return, it cannot be said that the disclosure of income, subsequent to original assessment, was not in good faith. The expression "good faith" has not been defined under the Act. Under sub-section (22) of section 3 of the General Clauses Act, 1897, or in ordinary parlance, "good faith" means an act done honestly even if it is tainted with negligence or mistake. In the case of Laxman v. CIT [1988] 174 ITR 465 (Bom), the assessee had filed his returns after the due date and made an application for waiver of penalty and interest. The Commissioner rejected the application on the ground that the returns were not filed voluntarily. The Inspector of Income-tax had visited the building of the assessee in the course of survey operations and thereafter the returns were filed as a consequence of fear of detection and follow-up acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avit. The counter-affidavit filed by the Income-tax Officer is of no assistance to conclude that the Commissioner of Income-tax had rejected the applications on the ground that the revised returns were filed only in answer to a notice issued under section 148 of the Act. The reply in the counter-affidavit is based only on the impugned order. It has not been mentioned in the impugned order that the applications of the petitioners are not maintainable because they had filed their respective revised returns in answer to the notices issued to them under section 148 of the Act, after completing the original assessments. In Mohinder Singh Gill v. Chief Election Commissioner, AIR 1978 SC 851, 858, it is held that "when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to the court on account of a challenge, get validated by additional grounds later brought out". There is no whisper in the counter-affidavits that the applications under section 273A of the Act have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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