Sushila Indubhai Patel Vs Union of India and Ors.

 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
 ORDINARY ORIGINAL CIVIL JURISDICTION

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 WRIT PETITION NO.1021 OF 1993

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 Sushila Indubhai Patel
 C/o.Shri Ramanbhai H. Patel
 109, Jawahar Nagar, Ground
 Floor, Road No.1,
 Goregaon (West),
 Bombay - 400 062. .. Petitioner.

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 V/s.

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 1. Union of India, through
 the Secretary, Ministry
 of Finance, Government
 of India, North Block,
 Central Secretariat,
 New Delhi - 110 001.

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 2. V.D. Wakharkar,
 Commissioner of Income-tax,
 City X, Bombay, having
 his office at Mahalaxmi
 Chambers, Mahalaxmi,
 Bombay - 400 034. .. Respondents.

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 Mr.B.V. Jhaveri for the petitioner.

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 None for the respondents.

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CORAM : F.I. REBELLO &

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 J.P. DEVADHAR, JJ.
DATED : 13TH AUGUST, 2007.

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ORAL JUDGMENT : (Per J.P. Devadhar, J.)

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 1. In this petition, challenge is to the order

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 of the Commissioner of Income Tax dated 28th
 January, 1993 passed under Section 273A of the
 Income Tax Act, 1961 (‘Act’ for short). By the said
 order, the C.I.T. has declined to waive
 interest/penalty levied against the petitioner/
 assessee under various provisions of the Act.

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 2. The assessment years involved herein are
 A.Y. 1979-80 and A.Y. 1987-88.

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 3. Prior to A.Y. 1975-76, the petitioner was
 assessed to income tax regularly. On 17th August,
 1975, the petitioner went to America. During
 financial year 1977-78 and 1978-79, the petitioner
 visited India for a couple of months. On 7th June,
 1979, the petitioner once again went to America and
 returned to India after about 9-1/2 years on 31st
 January, 1989.

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 4. On 24th February, 1989, the petitioner paid
 self-assessment tax for A.Y.1979-80 to 1.Y.1988-89
 on the taxable income of Rs.17,399/-, Rs.24,650/-,
 Rs.24,691/-, Rs.25,527/-, Rs.26,083/-, Rs.27,635/-,
 Rs.29,993/-, Rs.38,404 and Rs.46,353/- respectively.
 Accordingly, returns of income were also filed. On
 27th February, 1989, the assessee filed an
 application under Section 273A of the Act before the
 C.I.T. seeking waiver of interest and penalty
 imposable under various provisions of the Act in the
 aforesaid assessment years.

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 5. The assessing officer thereupon issue
 notices under Section 148 of the Act and thereafter
 completed assessments by accepting the return filed

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 by the assessee. The assessing officer levied
 interest under Section 139(8), Section 215, Section
 217 and after initiating proceedings levied penalty
 under Section 271(1)(a), 271(1)(b) and 271(1)(c) of
 the Act.

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 6. In response to the application for waiver of
 interest / penalty filed on 27th February, 1989, the
 CIT issued notice belatedly on 30th September, 1992
 and by the impugned order dated 28th January, 1993
 rejected said application on the ground that the
 petitioner has neither paid the interest nor made
 any satisfactory arrangement for payment of
 interest. The CIT concluded that since there was
 undue delay in submission of return of income, there
 was delay in payment of self-assessment tax and,
 therefore, not a fit case for exercising
 jurisdiction under Section 273A of the Act.
 Challenging the aforesaid order of the CIT, the
 present petition is filed.

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 7. On 8th June, 1993, this petition was
 admitted and interim relief was granted in terms of
 prayer clause (c) of the petition thereby
 restraining the respondents from taking any steps or
 proceedings to implement the order dated 28th
 January, 1993.

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 8. To complete narration of facts, we may note
 that after filing of the petition, the CIT (A) by an
 order dated 22nd February, 1995 has deleted penalty
 levied under Section 271(1)(a) for A.Y. 1980-81 to
 a.y. 1988-89. Similarly, by order dated 22nd
 February, 1995 the CIT (A) has deleted penalty
 levied under Section 271(1)(c) of the Act for A.Y.
 1980-81 to A.Y. 1985-86.

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 9. From the impugned order, it is seen that the
 waiver application of the petitioner has been
 rejected only on the ground that the assessee has
 neither paid the interest nor made any satisfactory
 arrangement in respect thereof. From the
 application made by the petitioner, it is seen that
 during the relevant assessment years the returns of
 income could not be filed within the stipulated
 time, because, the petitioner was outside India.
 Immediately after returning to India, the petitioner
 had filed returns of income voluntarily for all the
 years. It is pertinent to note that the income
 derived by the petitioner comprised mainly interest
 from FDR and dividend income.

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 10. It is not in dispute that the return of
 income as filed have been accepted in toto without
 making any additions. In the application for waiver
 of interest / penalty filed under Section 273A of

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 the Act on 27th February, 1989 the assessee had
 specifically stated that she had kept the amounts in
 bank as Fixed Deposit (FDR) and specifically
 undertook to make arrangement for payment of taxes,
 if any, remaining payable to the satisfaction of the
 CIT. While disposing of the said application
 belatedly on 28th January, 1993, the CIT has not
 even ascertained as to whether said FDR’s were still
 available as security. It is contended by the
 assessee that on 16th June, 1993 while filing return
 for A.Y.1992-93, the Assessing Officer was informed
 that the petitioner had Fixed Deposits of
 substantial amount for recovering unpaid interest
 chargeable under the Act. It is also pertinent to
 note that the penalty levied under Section 271(1)(a)
 for A.Y. 1980-81 to A.Y.1988-89 have been deleted
 by the CIT (A) and the same is accepted by the
 revenue. Similarly, penalty levied under Section
 271(1)(c) of the Act has also been deleted by the
 CIT (A) for A.Y. 1980-81 to A.Y. 1985-86.

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 11. In these circumstances, we are of the
 opinion that CIT was not justified in rejecting the
 application for waiver of interest/penalty on the
 ground that the assessee had not made satisfactory
 arrangements for payment of tax.

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 12. Accordingly, the petition succeeds. The

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 impugned order dated 28th January, 1993 is quashed
 and set aside and it is held that the assessee is
 entitled to waiver of interest / penalty as claimed
 in the application dated 27th February, 1989.

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 13. During the pendency of the Writ petition,
 the recovery of interest / penalty was stayed by
 this Court. However, it is claimed that even after
 the stay granted by this Court on 8th June, 1993,
 the petitioner on 16th March, 1996 has paid the
 interest levied under Sections 139(8) and 215 of the
 Act for A.Ys. 1980-81 to 1988-89. Since the
 revenue could not appropriate the said amount on
 account of the stay granted by this Court, the
 petitioner would be entitled to refund of the said
 amount without any interest.

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 14. Rule is made absolute in terms of this order
 with no order as to costs.

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 sd/-

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 (F.I. REBELLO, J.)

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 sd/-

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 (J.P. DEVADHAR, J.)

Sushila Indubhai Patel v. Union of India and Ors.

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Sushila Indubhai Patel v. Union of India and Ors.

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