2005 (7) TMI 89 - HC - Income Tax

Petitioner entitled to waiver of interest & penalties for multiple years under Income-tax Act

The High Court held that the petitioner is entitled to the waiver of interest and penalties for the assessment years 1982-83 to 1986-87 under section 273A ... Waiver of interest and penalty - Interpretation of one-time relief under section 273A(3) of the Income-tax Act - Commissioner's power to grant relief for multiple assessment years in a single orderWaiver of interest and penalty - Interpretation of one-time relief under section 273A(3) of the Income-tax Act - Commissioner's power to grant relief for multiple assessment years in a single order - Whether the Commissioner of Income-tax was obliged to grant waiver of interest and penalty for the assessment years included in a single application once relief was granted for some of those years - HELD THAT: - Section 273A(3) permits the Commissioner to grant relief by an order that may relate to one or more assessment years but bars subsequent grants of relief after such an order. A plain reading shows the provision contemplates a one-time exercise of the Commissioner's power covering any number of assessment years included in the application. Here the petitioner filed a single application covering multiple assessment years. The Commissioner granted relief only for two assessment years and denied relief for the remaining years by a brief statement that conditions were not satisfied. The statutory scheme and the phrase 'such order relates to one or more assessment years' require that, when exercising the power in a single order, the Commissioner must consider and, where appropriate, grant relief for the assessment years encompassed by that same application; the power cannot be parcelled out so as to preclude relief for years included in the one application without adequate reasoned differentiation. Applying this interpretation, the tribunal held that the Commissioner ought to have extended waiver to the remaining assessment years encompassed by the petitioner's single application and accordingly directed grant of relief for those years.Relief of waiver of interest and penalty is to be granted for assessment years 1982-83 to 1986-87; the petition is allowed.Final Conclusion: The High Court allowed the petition and directed the respondents to grant waiver of interest and penalty for assessment years 1982-83 to 1986-87, holding that section 273A(3) requires a one-time consideration of all assessment years included in a single application. Issues:Petition for waiver of interest and penalties for multiple assessment years under section 273A of the Income-tax Act, 1961.Analysis:The petitioner filed a petition seeking waiver of interest and penalties for various assessment years under section 273A of the Income-tax Act, 1961. The Commissioner of Income-tax granted relief for only two assessment years, citing that the conditions for waiver were not satisfied for the other years. However, section 273A(3) of the Act states that once relief is granted for one or more assessment years, no further relief can be provided for any other year. The provision allows for relief for any number of assessment years in one order but prohibits subsequent reliefs. In this case, since the petitioner applied for multiple assessment years in one application, the Commissioner should have granted relief for all years, not just two.Therefore, the High Court held that the petitioner is entitled to the waiver of interest and penalties for the assessment years 1982-83 to 1986-87. The court directed the respondents to grant the relief accordingly, making the rule absolute. This judgment clarifies the interpretation of section 273A and emphasizes that relief can be granted for multiple assessment years in one order under the provision, ensuring consistency and fairness in the application of waiver of interest and penalties.