By This Writ Petition, An Order Passed By The Commissioner Ofincome-Tax Has Been Challenged v. Commissioner Of Income-Tax. Theoperative Portion Of The Judgment Is –

THE HON’BLE SRI JUSTICE BILAL NAZKI AND THE HON’BLE SRI JUSTICE G.CHANDRAIAH 13-02-2006 WRIT PETITION No. 189 of 1996 Between: M/s.Katika Ramulu & Brothers, Rajahmundry. …Petitioner AndCommissioner of Income-tax, Visakhapatnam & another. ….Respondents. THE HON’BLE SRI JUSTICE BILAL NAZKI AND THE HON’BLE SRI JUSTICE G.CHANDRAIAH WRIT PETITION No. 189 of 1996 ORDER: (Per Hon’ble Sri Bilal Nazki, J) Heard learned counsel for the parties. By this writ petition, an order passed by the Commissioner ofIncome-tax has been challenged. It appears that an application was filed by the petitioner on04.2.1984, seeking waiver of penalty. This application was dismissedand thereupon, he filed a writ petition being writ petition No.5851 of1985. This writ petition was allowed and the matter was remandedback to the Commissioner of Income-tax, by a judgment reported inK.Ramulu and Bros. V. Commissioner of Income-tax. Theoperative portion of the judgment is – “We are, therefore, satisfied that the conclusion of theCommissioner that the petitioner did not make the disclosure inquestion in good faith is without any valid basis and is vitiated byextraneous considerations. The Commissioner is not justified inholding that the petitioner did not act in good faith in making thedisclosures in question. As this is the only reason given by him fornot exercising the discretion vested in him under section 273A (1)(ii) of the Act, we set aside the impugned order of the Commissionerin Hqrs.No.1/59/83-84 dated march 12, 1985. Once thepreconditions for the exercise of the discretion are satisfied, theCommissioner is bound to exercise his discretion, keeping in viewthe following observations of the Supreme Court in Hirday Narain(L.) v. ITO [1970] 78 ITR 26, 31.” Categorically the Court was of the view that petitioner had madedisclosure in question in good faith and the Commissioner was notright in coming to a conclusion that petitioner had not made thedisclosure in question in good faith. The Court found this conclusionof the Commissioner to be without any valid basis and vitiated byextraneous considerations. While remanding the case, the Courtdirected the Commissioner to keep in view the observations made inthe judgment and pass orders afresh. The Commissioner surprisingly introduced new material to theorder which he had passed and as a matter of fact, he even statedthat the petitioner had been prosecuted and the Court of Special Judge for Economic offences had convicted the petitioner andimposed a fine of Rs.500/- for an offence under Section 277 of theIncome-tax Act. On the basis of these extraneous grounds, as amatter of fact, he went beyond the judgment of this Court, and hestated – “The Hon’ble High Court restored to this Office the assessee’spetition for reconsideration. The Hon’ble High Court came to theconclusion that the assessee made the petition in good faith.Unfortunately certain material facts were not brought to the notice ofthe Hon’ble High Court. The assessee, in the covering letter for theRevised Returns, admitted in so many words that the incomeoriginally assessed for each of the five years under considerationwas far below the income earned, and that since the partners werefeeling guilty for having suppressed their real incomes, they werefiling Revised Returns. On the strength of this evidence, the SpecialJudge, Hyderabad found the assessee and the partners thereinguilty and convicted them for offences u/s.277.” The Commissioner had thought that certain material was notbrought to the notice of the Court. In that case, nobody stopped himto seek clarification from the Court. But in no case, he was within hisrights to ignore the judgment of the High Court, which he has done bythe impugned order. The Commissioner had thought that certain material was notbrought to the notice of the Court. In that case, nobody stopped himto seek clarification from the Court. But in no case, he was within hisrights to ignore the judgment of the High Court, which he has done bythe impugned order. On this ground alone that the Commissioner has tried to subvertthe judgment of this Court and not implemented the judgment of thisCourt in letter and spirit, we set aside the order of the Commissionerand remand the case back to him and direct him to dispose of theapplication within two weeks from today, keeping in view theobservations made in this order and also in the judgment citedabove. Writ petition is accordingly allowed. No order as to costs. ________________ 13[th] February 2006 N.B: Furnish copy by 14.2.2006. (B/o) ajr __________________(G.CHANDRAIAH, J)