(Per : HONOURABLE MR. JUSTICE AKIL KURESHI) 1. The petitioner assessee has, in the present petition, challenged an order dated 26-7-2002 passed by the Commissioner of Income-tax.
2. The petition arises in the following factual background. For the assessment years 1993-94 and 1994-95 the petitioner, though had deducted tax at source as provided under the Income Tax Act, 1961 ('the Act' for short), had not furnished the said returns of such deductions as required under section 206 of the Act within the time prescribed. The Assessing Officer, therefore, issued two separate show-cause notices calling upon the petitioner to show cause why penalty under section 272A(2)(c) be not imposed amounting to Rs.13,300/- and Rs.51,000/- for the assessment years 1993-94 and 1994-95 respectively at the rate of Rs.100/- per day of such default.
3. The petitioner did not reply to such show-cause notices nor appeared before the Assessing Officer when such proceedings were fixed for hearing. The Assessing Officer, therefore, in absence of any explanation from the petitioner imposed penalties of Rs.13,300/- for the assessment year 1993-94 at the rate of Rs.100/- per day for a total default of 133 days and of Rs.51,000/- for the assessment year 1994-95 for a total default of 510 days by two separate orders both dated 18-7-2000.
4. The petitioner challenged these orders by filing two separate revision petitions under section 264 of the Act before the Commissioner. The Commissioner, by his common impugned order dated 26-7-2002 dismissed both the revision petitions. Hence, the petition.
5. The counsel for the petitioner vehemently contended that the Assessing Officer erred in initiating penalty proceedings and imposing penalties. The Commissioner also gravely erred in law in refusing to strike down such orders in exercise of powers under section 264 of the Act. The counsel submitted that the petitioner had rendered sufficient explanation for not furnishing the particulars within the time prescribed. He submitted that the default, if any, was technical in nature since admittedly tax was deducted and also deposited with the Income Tax Department. The counsel further submitted that the Assessing Officer had initiated penalty proceedings after undue delay. He submitted that such proceedings having been initiated after five to six years, cannot be stated to have been raised within reasonable period.
5.1 In support of his submissions, the counsel relied on the decision of a Division Bench of this court in the case of Commissioner of Income-Tax vs. Harsiddh Constructions Pvt. Ltd. reported in 244 ITR 417 wherein this court upheld the decision of the Income Tax Appellate Tribunal setting aside the penalty for delay in furnishing the particulars on the ground that there was no malafide intention on the part of the assessee to deliberately disregard the legal obligations cast upon him.
6. On the other hand, learned senior counsel Shri Bhatt for the Department opposed the petition contending that the petitioner filed no reply to the show-cause notices issued by the Assessing Officer. He had not participated in the penalty proceedings. Even before the Commissioner, the only explanation rendered was a one-line statement saying that the Accountant of the assessee was under the impression that it was supposed to be filed alongwith the regular income-tax return. No further details have been supplied. Whether the assessee had sufficient cause is a question of fact. The Commissioner having examined the same, this court in exercise of writ jurisdiction would not interfere. The counsel further submitted that the question of belated initiation of proceedings was never raised before the income-tax authorities. The same being a mixed question of law and facts cannot be raised for the first time before this court in a writ petition.
6.1 In support of his contentions, the counsel relied on the decision of Bombay High Court dated 13-8-2009 passed in the case of John D'souza vs. Commissioner of Income Tax and another wherein the scope of the powers of the Commissioner under section 264 of the Act came up for consideration. The Division Bench referred to and relied on the decision of the Apex Court in the case of State of Kerala vs.
K.M. Chariya Abdulla & Co., AIR 1965 SC 1585 in which the Apex Court had made the following observations:-
“The jurisdiction to grant an extension of time and condone the delay in rectifying the defect is expressly conferred on the AO by s. 139(9). Such a prayer must obviously and of necessity be made to the AO. If the AO does not exercise his power favourably to the assessee, the CIT may in exercise of revisional jurisdiction examine the legality or propriety of the order of the AO. However, in the absence of such a prayer having been made to the AO, the prayer cannot for the first time be made before the CIT in revision.”
7. Having thus heard the learned counsel for the parties and having perused the documents on record, what emerges is that admittedly there was delay on the part of the assessee in furnishing particulars required under section 206 of the Act regarding tax collected at source. For the assessment year 1993-94, such delay was of 133 days. For the assessment year 1994-95, such delay amounted to 510 days. Section 272A(2)(c) provides for penalty for failure to furnish in time any of the returns, statements or particulars mentioned in section 133 or section 206 or section 206C or section 285B. Such penalty that the Assessing Officer may impose would be at the rate of Rs.100/- for every day during which the failure continues subject to the provision that the penalty shall not exceed the amount of tax deductible or collectible, as the case may be.
8. It is true that section 273B provides inter alia that notwithstanding the provisions contained in section 272A and other penal provisions mentioned therein, no penalty would be imposable on the person or the assessee, as the case may be, if he proves that there was reasonable cause for the failure. To enable the petitioner to take benefit of such provision contained in section 273B, he had to prove that there was reasonable cause for such failure. In the present case, the petitioner assessee filed no reply to the show-cause notices issued by the Assessing Officer. He did not even participate in the penalty proceedings. Before the Assessing Officer, therefore, there was no explanation of the petitioner for the admitted delay. The Assessing Officer, therefore, proceeded to impose the penalty as proposed in the show-cause notices. We may recall that with respect to quantum of penalty, the Assessing Officer had no discretion. The Assessing Officer had to impose penalty at the rate of Rs.100/- per day of default, if he was of the opinion that such penalty was otherwise justified. This, of course, was subject to the maximum limit of the tax deductible.
9. Before the Commissioner in revision proceedings also, the assessee did not make any serious attempt to explain the nature of delay and the cause which prevented him from filing the returns within time. In the revision petitions which were presented before the Commissioner, the only statement made for explaining the delay was that “The annual return in Form 26A was filed late because the then Accountant was under an impression that it was supposed to be filed alongwith the regular income-tax return.” There was no further explanation with respect to the particulars of such account, the reason why he carried such a belief or any further support in the form of his statement or affidavit presented before the Commissioner. By one single sentence, the assessee-petitioner desired to explain the delay of 133 days and 510 days in furnishing the particulars. Such explanation was not accepted by the Commissioner. He noted that before the Assessing Officer, no such explanation was rendered. Before him, it was contended that delay in filing the particulars occurred due to ignorance of law on the part of the Accountant engaged by the assessee since he was under bonafide impression that the particulars had to be filed alongwith the income-tax return.
The Commissioner, however, noted that no explanation was offered at the time of hearing of the petition which took place. In short, such explanation was not accepted by the Commissioner.
10. The contention with respect to delay in initiation of the proceedings for penalty was never raised before the income-tax authorities. Obviously, since the petitioner did not participate before the Assessing Officer such contention was not raised. In the revision petitions that the petitioner filed before the Commissioner also, no such contention was taken. Admittedly no period of limitation is prescribed for initiation of the proceedings. Whether such proceedings are initiated within a reasonable period or not must be judged in facts and circumstances of each case. When no contention is raised before the authorities below, we refuse to examine such contention in this petition.
11. In our view, the entire issue revolves around factual aspects. The petitioner assessee not having rendered any explanation before the Assessing Officer and having made only a feeble attempt to render a brief explanation before the Commissioner which was not accepted, no question of interference arises. Hence, the petition is dismissed. Rule is discharged.
( Akil Kureshi, J. ) ( Harsha Devani, J. ) hki