B.J.DIVAN, N.H.BHATT - (1.) The petitioner herein challenges the order of the Commissioner or Income-tax Gujarat III the respondent herein in respect of an application made by the petitioner for waiving the penalty in exercise of the power conferred by sec. 273-A of the Income-tax Act 1961 The petitioner is an income-tax assessee and for assessment years 1969 1970 and 1971-72 certain penalties were imposed by the Income-tax Officer after passing the assessment orders. For each of the three years 1969-70 1970 and 1971-72 penalties under sec. 273 were imposed and for the year 1970-71 in addition to the penalty under sec. 273(b) penalty under sec. 271(1)(a) was imposed. The Indian Income- tax Act was amended with effect from October 1 1975 and from that day sec. 273-A was inserted. Under that section the Commissioner of Income-tax has the power to reduce or waive penalties under sec. 271(b) (a) and also under sec. 273(b) if the conditions mentioned in sec. 273-A are satisfied. The petitioner contended before the respondent that all the conditions prescribed by sec. 273-A have been fulfilled in her case and therefore she should be given relief in respect of these penalties under sec. 273A. By his order dated November 26 1976 a copy of which is annexed as Annexure B to the petition the respondent rejected the application and the ground for rejection of the application was that the assessee had filed appeals to the Appellate Assistant Commissioner of Income-tax against the Income-tax Officers orders imposing the penalties for these three different assessment years. The Appellate Assistant Com- missioner had dismissed the appeals and confirmed the penalties imposed by the Income-tax Officer and the order of the respondent proceeds Since the assessee had taken recourse to the other remedy i.e. appeal to the A. A. C. her application to me for waiver of penalties under sec. 211(1) for A. Y. 1970 and under sec. 273(b) of the I. T. Act 1961 for Assessment Years 1969- 70 1970 and 1971-72 becomes redundant and not feasible. It is this order of the Commissioner of Income-tax the respondent herein which has been challenged by the petitioner.
(2.) Section 273-A of the Income-tax Act provides 273 (1) Notwithstanding anything contained in this Act the Commissioner may in his discretion whether on his own motion or otherwise (i) reduce or waive the amount of penalty imposed or imposable on a person under clause (i) of sub-sec. (1) of sec. 271 for failure without reasonable cause to furnish the return of total income which he was required to furnish under sub- sec. (1) of sec. 139; or (ii) reduce or waive the amount of penalty imposed or imposable on a person under clause (iii) of sub-sec. (1) of sec. 271; or (iii) reduce or waive the amount of interest paid or payable under sub-sec (8) of sec. 139 or sec. 215 or sec. 287 or the penalty imposed or imposable under sec. 2 13 If he is satisfied that such person meets with the requirements of clauses (a) (b) or (c) and also has in the cases referred to in clauses (a) (b) and (c) co-operated in any inquiry 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. Nowhere in sec. 273-A is there any provision prescribing that in the event of an appeal having been preferred against the order of penalty the provisions of sec. 273-A cannot be invoked. It may be pointed out that where the Legislature wants to so provide it in terms says that in the case of an appeal having been preferred or an appeal being available revision would not lie. For example under sec. 264 sub-sec. (4) which provides for revision of the orders at the instance of an assessee the Commissioner shall not revise any order under sec. 64 where an appeal against the order lies to the Appellate Assistant Commissioner or to the Appellate Tribunal but has not been made and the time within which such appeal may be made has not expired or in the case of an appeal to the Appellate Tribunal the assessee has not waived his right of appeal; or where the order is pending on an appeal before the Appellate Assistant Commissioner; or where the order has been made the subject of an appeal to the Appellate Tribunal Similar provisions are also to be found in the Code of Civil Procedure sec. 115 and also in the Code of Criminal Procedure. There is no similar provision so far as the exercise of the power under sec. 273-A is concerned. The whole concept under sec. 273-A is that the assessee concerned admits his liability to penalty but relies upon certain mitigating circumstances or certain circum- stances specified in the section for the purpose of getting the penalty waived or reduced. When the assessee approaches the Commissioner under sec. 273-A he does not dispute his liability to pay the penalty. All that he says is that he should be given the relief of reduction or waiver by the Commissioner in his discretion in view of the fact that the conditions specified in sec. 273-A are satisfied. However when an assessee files an appeal against the order of penalty he is challenging the very imposition of penalty and his effort in the appeal is to show that in the circums- tances of his particular case penalty was not imposable at all. This dis tinction between what can be urged in an appeal and what can be urged in proceedings under sec. 273 A must be clearly borne in mind. The respondent in the order under challenge has not borne that distinction in mind. In the absence of any specific provision similar to sub-sec. (4) of sec. 264 it must be held that the respondent was in error when he refused to exercise the jurisdiction vested in him by law on the ground that an appeal had been preferred to the Appellate Assistant Commissi- oner. Merely because the penalty was confirmed by the Appellate Assis- tant Commissioner it was not open to the respondent to refuse to enter- tain the appeal because all that he has to satisfy in proceedings under sec. 273-A is whether the conditions specified in sec. 273-A are fulfilled or not and if they are fulfilled to what extent relief against the penalty imposed either in the form of waiver or reduction can be given to the assessee concerned.
(3.) Since the grounds given by the respondent for not exercising the jurisdiction under sec. 273-A are extraneous to the section and are not available to him in law this Special Civil Application must be allowed.;