Law: Income Tax Act, 1961

Section: 139,217,271,273

Income-tax----Penalty---Interest---Failure to file returns in time---Waiver of penalty and interest---Condition precedent---Disclosure of income and payment of tax--¬Payment of taxes for six assessment years in a single day---Tax due for some years not paid in full---Overall discharge of liabilities for all the years considered together---Not sufficient---Discretion not to waive penalty and interest for some assessment years---Justified---Indian Income Tax Act, 1961, Ss.139, 217, 271, 273---Constitution of India, Art 226. Income-tax is an annual levy. Each "previous year" is a distinct unit of time for the purpose of assessment and the profits made or the liabilities or losses incurred before or after the relevant previous year are immaterial in assessing the liabilities in a particular previous year. The conditions precedent for the exercise of the discretion for waiver or reduction of the penalty or interest are those mentioned in clauses (a), (b) and (c) of section 273A(1) of the Income Tax Act, 1961. Disclosure of income coupled with the payment of the tax admittedly due on the admitted income is a condition precedent for entitling an assessee for consideration of his claim for waiver of the penalty as well as the interest chargeable and unless the condition is satisfied the Court cannot interfere with the refusal to exercise his discretion by the Commissioner of Income-tax under section 273A. The assessee disclosed his income for the assessment years 1971-72 to 1977-78 and paid the tax as calculated by him for the six assessment years. After remitting the tax the assessee filed returns on December 4, 1979, and the Income Tax Officer passed assessment orders relating to the six years. While making the order of assessment interest was charged under sections 139(8) and 217 and penalties were imposed under sections 271(1)(a) and 273(b). The assessee applied for waiver of interest and penalty. Waiver was allowed only in respect of some years. On a writ petition challenging the order: Held, dismissing the writ petition, that it was not in controversy that for certain assessment years, the tax due on the admitted income had not been remitted in full. The fact…

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