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2005 DIGILAW 3021 (RAJ)

Sangram Singh Mehta v. Income

2005-11-17

DALIP SINGH

body2005
JUDGMENT 1. - In this writ petition, the petitioner has, challenged among others the order dated September 11, 1991 (annexure 1), which is an order passed on the application under section 154 read with sections 220(2A) and 273A of the Income-Tax Act, 1961 (hereinafter referred to as "the IT Act"), moved by the assessee-petitioner. 2. The facts need not be mentioned in detail. Suffice it to say that there was a demand of tax, interest and penalty against the petitioner, Sangram Singh Mehta for the assessment year 1966-67. The petitioner was unable to meet the said demand on account of various reasons mentioned in the writ petition and subsequently the petitioner moved an application dated March 7, 1986 (annexure A), before the Commissioner of Income-tax, Jaipur, for waiver of interest under sections 217 and 220 of the Income-tax Act. The case of the petitioner is that on the said application after deliberation, the Commissioner of Income-tax, Jaipur, on March 29, 1988, sent a communication to the Income-tax Officer, A-Ward, Jaipur, which is at page 127 and which was filed along with the additional affidavit on September 14, 2005, before this court which reads as under : "Office of the Commissioner of Income-tax, Jaipur. Dated : 29.03.1988. No. J/IT/VD/220(2)/2/87-88/3369. The Income-tax Officer, A-Ward, Jaipur. Sub : Waiver of interest charged under sections 217 and 220(2) and penalties-Shri Sangram Singh Mehta, Jaipur-assessment year, 1966-67. I am directed to refer your letter No. ITO/A-Ward/Dossier/87-88/ 334, dated March 25, 1988, regarding waiver of interest and penalties in the case of Shri Sangram Singh Mehta of Jaipur for the assessment year 1966-67. In view of the arrear clearance drive and the fact that the demand is very old and pertains to the assessment year 1966-67 and considering the proposal of the Income-tax Officer and the Inspecting Assistant Commissioner's endorsement that the assessee, had rendered co-operation to the Department in terms of clause (II/ III) of sub-section (2A) of section 220 of the Income-Tax Act, the worthy Commissioner of Income-tax has agreed to consider the proposal sympathetically for waiver of interest and penalties as per rules. You are, therefore, requested to please send the cheque to the bank immediately for collection. Formal order for waiving the interest and penalties will be passed after the cheque is cleared and the amount is collected. (Sd.) D.P. Govil Income-tax Officer (Judl.) For Commissioner of Income-tax, Jaipur." 3. You are, therefore, requested to please send the cheque to the bank immediately for collection. Formal order for waiving the interest and penalties will be passed after the cheque is cleared and the amount is collected. (Sd.) D.P. Govil Income-tax Officer (Judl.) For Commissioner of Income-tax, Jaipur." 3. The petitioner further contended that in view of the aforesaid, since the financial year was coming to a close on, March 31, 1988 and the cheque would not be realised before the said date, on the request of the Income-tax authorities, the petitioner submitted a cash challan for the deposit of the amount of Rs. 49,349 on March 30, 1988 and the same was deposited after being duly verified and authorised by the Income-tax authorities on March 30, 1988, itself. Thus, the case of the petitioner is that the petitioner acted on the basis of the order that was sent on March 29, 1988, by the office of the Commissioner of Income-tax, Jaipur, and was waiting for formal order for waiving of the penalty and interest as has been indicated in the said letter that these would be passed after the cheque is, cleared and the amount is collected. However, no such order was passed in favour of the petitioner. 4. The petitioner then submitted an application under section 154 of the Income-tax Act. The petitioner further moved fresh applications (annexures G and H) on January 20, 1989, praying for withdrawing the orders dated January 3, 1989 (annexures E and F), in the light of the order dated March 29, 1988. By the orders dated January 3, 1989 (annexures E and F) the applications dated March 7, 1988, were rejected by the respondents. In the applications dated January 20, 1989, the petitioner referred to the order of the Commissioner of Income-tax, dated March 29, 1988 and prayed that the formal orders be passed and the orders dated January 3, 1989, be set aside on various grounds as mentioned in the application. 5. On the applications dated January 20, 1989 (annexures G and H), filed by the petitioner, the order, annexure I, was passed on September 11, 1991. 5. On the applications dated January 20, 1989 (annexures G and H), filed by the petitioner, the order, annexure I, was passed on September 11, 1991. The said order has been passed firstly on the ground refusing to set aside the order dated January 3, 1989, stating that no opportunity of personal hearing was required to be given and if such an opportunity is not provided, the order cannot be termed to be void. On the merits, however, it was stated in para 2 of the said order that no assurance, as claimed by the petitioner, was given by the Department and that whatever assurance was given was only to consider the application for waiver sympathetically provided the assessee's case was found to be covered by the relevant provisions of the Income-tax Act. 6. It is this order, annexure I, dated September 11, 1991, which the petitioner has challenged in the present writ petition. The petitioner in paras 12 and 13 of the writ petition has given the factual position with regard to the assurance being given to the petitioner by the Commissioner of Income-tax and the consequential order dated March 29, 1988, giving details of the said letter which was written by the office of the Commissioner of Income-tax to the Income-tax Officer. This had become necessary because in the order, annexure I, dated September 11, 1991, the respondents had clearly stated that no assurance had been given to the petitioner ; even no reference to the letter of the Commissioner of Income-tax dated March 29, 1988, was made in the said order. 7. The submission of learned counsel for the petitioner, inter alia, is that the Commissioner of Income-tax while passing the order, annexure I, dated September 11, 1991, had not in fact decided the case in the light of the order dated March 29, 1988 and in case the said order dated March 29, 1988, had been perused by the Commissioner of Income-tax, probably the order dated September 11, 1991, would not have been passed. 8. A reply to the aforesaid contentions in paras 12 and 13 was given by the respondents wherein they denied that there was any settlement arrived at. It was further denied that a cheque for Rs. 49,349 was only to be encashed upon the waiver of interest in full. 8. A reply to the aforesaid contentions in paras 12 and 13 was given by the respondents wherein they denied that there was any settlement arrived at. It was further denied that a cheque for Rs. 49,349 was only to be encashed upon the waiver of interest in full. In reply to para 13 of the writ petition no reference has been made to the order dated March 29, 1988, to which the petitioner has made specific reference in the writ petition. On the contrary, the respondents have denied the contents of para 13 and have submitted the reply to the said paragraphs on the basis of the information best to their knowledge. 9. Since the bone of the contention between the parties in this writ petition was the letter dated March 29, 1988, after hearing the parties this court on January 13, 1998, passed the following order : "Hon'ble Mr. Rajendra Saxena, J. 13.01.1998. Shri N.M. Ranka, Senior Advocate with Shri R.K. Yadav for the petitioners. Shri Amod Kasliwal for the respondents. The petitioners, vide para No. 13 of the writ petition have specifically pleaded that the respondent No. 2, vide his letter No. J/IT/VD/ 220(2)12/87-88/3369, dated March 29, 1988, to the Income-tax Officer, A-Ward, Jaipur, had instructed to send the cheque to the bank immediately for collection and assured for making formal order for waiving interest and penalties after the cheque was cleared. The respondents in their reply denied this fact, vide para No. 13. The petitioners have reiterated the said pleadings in their rejoinder. In such circumstances, learned counsel for the petitioner is directed to produce the original record including the aforementioned letter dated March 29, 1988. The respondents shall also permit petitioner No. 1, Shri Sangram Singh Mehta, to inspect the record in this case in their office within two weeks. Put up on March 3, 1998, or final disposal. (Sd.)" 10. After the aforesaid order was passed by this court, the petitioner inspected the record and prepared the inspection note on the basis of which the additional affidavit along with certain documents and annexures was filed on September 14, 2005. Put up on March 3, 1998, or final disposal. (Sd.)" 10. After the aforesaid order was passed by this court, the petitioner inspected the record and prepared the inspection note on the basis of which the additional affidavit along with certain documents and annexures was filed on September 14, 2005. Along with the said additional affidavit the letter dated March 29, 1988, sent by the office of the Commissioner of Income-tax, Jaipur, to the Income-tax Officer, A-Ward, Jaipur, on the subject of waiver of interest charged under sections 217 and 220(2) and penalties in the case of the assessee, Sangram Singh Mehta, for the assessment year 1966-67 was also produced. The said letter had already been referred to above. To the additional affidavits and the documents which were produced by the petitioner, the respondents have not filed any counter-affidavit. Thus, the fact remains that the genuineness of the letter dated March 29, 1988 and its being on record available with the respondents is not in dispute. That being so, in my opinion, the order dated September 11, 1991, suffers from an error apparent on the face of the record. In the order it has been stated that no assurance had been given to the petitioner by the Department or the Commissioner of Income-tax. No reference to the letter dated March 29, 1988, has been made in the order impugned dated September 11, 1991. Hence, it cannot be said that the contents of the said letter have been taken note of while passing the order dated September 11, 1991. Since the order dated September 11, 1991, has been passed without reference to the order dated March 29, 1988, the same requires reconsideration after being set aside. 11. Hence, it cannot be said that the contents of the said letter have been taken note of while passing the order dated September 11, 1991. Since the order dated September 11, 1991, has been passed without reference to the order dated March 29, 1988, the same requires reconsideration after being set aside. 11. In view of the aforesaid, I am of the opinion that the order dated September 11, 1991 (annexure I), passed by the Commissioner of Income-tax deserves to be set aside with a direction to the respondents to decide the application filed by the petitioner afresh taking into consideration the facts mentioned in the writ petition and additional affidavit regarding the assurance as well as the letter dated March 29, 1988, written by the Commissioner of Income-tax to the Income-tax Officer, A-Ward, Jaipur, in relation to the waiver of penalty and interest on the tax amount in the case of the petitioner and the fact that on such an assurance the petitioner deposited the amount in cash on the request of the authorities. 12. Consequently, this writ petition is allowed. The order dated September 11, 1991 (annexure I), is set aside. The case is remanded to the Commissioner of Income-tax, Jaipur, for deciding the applications dated January 20, 1989, filed by the petitioner taking into account the facts relating to the passing of the order dated March 29, 1988 and subsequent facts regarding the deposit of amount by cash challan on 30th March, 1988, as has been mentioned above. *******