TMI Blog1978 (1) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessment years 1958-59, 1960-61, 1961-62, 1962-63 and 1963-64, had to be computed on the basis set out in clause (e) of the letter of the Commissioner of Income-tax dated 3rd March, 1969, addressed to the Income-tax Officer? 2. If the answer to question No. 1 is in the negative, whether the Tribunal was in error in reducing the penalties as imposed by the Inspecting Assistant Commissioner for each of the assessment years involved ?" The relevant facts that have to be stated for the purpose of answering these questions can be summarised thus. The assessee made a proposal to the CIT on May 11, 1968, for a settlement. In para. 7 of that proposal there is the following statement: "It is requested that, in view of the voluntary nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in order and is approved." Thereupon, minimum penalties were imposed for all the assessment years already mentioned on the assessee. The appeals before the AAC failed. The matter thereafter went up to the Tribunal. In the appeals taken by the assessee, the Tribunal came to the conclusion that there was no order under s. 271(4A) of the I.T. Act, 1961 (for short "the Act"). Nevertheless it allowed the appeals on the basis that the principle of promissory estoppel would apply and that penalty only to the extent of 5% mentioned in cl. (e) of the settlement, to which we have already adverted, can be imposed on the assessee. On the basis of the finding entered by the Tribunal, we must proceed in this case on the basis that there has been no o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plate any order in any particular form. With great respect, we are unable to agree with this decision. A reading of s. 271(4A) leaves no doubt in our mind that there must be an order. The proviso to sub-s. (4A) as well as sub-s. (4B) in clear terms refer to an order under sub-s. (4A) though the sub-section starts by using the words "reduce or waive the amount of minimum penalty imposable on a person under cl. (i) of sub-s. (1)" and "reduce or waive the amount of minimum penalty imposable on a person under cl. (iii) of sub-s. (1)" and does not in sub-s. (4A) refer to any order. When the sub-section is read with the wording of the proviso and the wording of sub-s. (4B) there can be no doubt whatever that there should be an order under sub-s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome as returned by such person had been accepted as the correct income." In fact, as we see it, the authority who is entitled to pass the order, whether it be the ITO or the IAC, depending upon the quantum of penalty to be imposed, would be obliged to act in accordance with the section because of the statutory obligation cast on the authorities. He will have no jurisdiction to act otherwise. The above obligation would cease to exist only if an order had been passed under s. 271(4A). We are informed by counsel that it has never been the practice to pass any formal order under s. 271(4A) and that this statement of the law would affect a number of other assessees who have got the benefit of the settlement and in whose favour no formal orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Agarwala [1975] 1 SCC 21; AIR 1974 SC 2325, and in Excise Commissioner v. Ram Kumar, AIR 1976 SC 2237, that the principle enunciated in the earlier decisions, to which we referred, are not applicable for the purpose of getting over the provisions of a statute. That is the view taken by the House of Lords too in Howell v. Falmouth Boat Construction Co. Ltd. [1951] AC 837. The principle is too well known and so does not need any further illustration by quoting from the judgment of the Supreme Court or from the judgment of the House of Lords. In the light of the above, we have to answer the first question that has been referred to us in the negative. The Tribunal was not justified in holding that the penalty levied which was based on the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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