Mohinder Singh Gill v. Chief Election Commr.[[1]],May Be Referred

THE HON’BLE SRI JUSTICE G.CHANDRAIAHANDTHE HON’BLE SRI JUSTICE CHALLA KODANDA RAM W.P.NO.22254 OF 2015 O R D E R (Per the Hon’ble Sri Justice G.Chandraiah) Heard both the counsel. 2. The assessee/petitioner is involved in finance and other businesses andduring survey operations conducted on 31.1.2008 by the respondent - Department,in respect of one G.Sanjeeva Reddy, who is said to be a partner of M/s S.V.Constructions, an agreement of sale was found, as per which, the petitioner wasfound to have individually paid an amount of Rs.1,22,50,000/-, out of Rs.4.9 lakhs,for purchase of landed property, along with three others and he has explained thesource of income. Out of the total amount, which the petitioner has paid, theassessment officer accepted the petitioner’s contribution of Rs.5,00,000/- and thebalance amount of Rs.1,17,50,000/- was treated as unexplained investment. Basedon certain receipts, which were impounded during survey, an additional amount ofRs.25,00,000/- was also brought to tax, on the ground that the petitioner along withothers paid Rs.5.9 crores, but not Rs.4.9 crores, as claimed by them. Challengingthe assessment order dated 30.12.2009, the petitioner filed appeal before theCommissioner of Income Tax (Appeals) and by order dated 21.2.2011, the appellateauthority, by accepting the explanation of the petitioner, deleted the addition ofRs.25,00,000/- and confirmed the balance amount of Rs.1,17,50,000/-, asunexplained investment, for tax. Aggrieved by order of the Commissioner(Appeals), in confirming the assessment order for Rs.1,17,50,000/-, the petitionerfiled appeal before the Income Tax Appellate Tribunal and similarly assailing thedeletion of Rs.25,00,000/-, the Revenue filed cross-appeal. The Tribunal by orderdated 25.1.2012 allowed the appeal filed by the Revenue and dismissed the appealof the petitioner and thus, the initial order of the assessment officer was restored. As per the claim of the petitioner, out of the total demand of Rs.68,91,242/-, anamount of Rs.58,71,064/- was paid and an amount of Rs.10,00,000/- was thebalance due to be paid to the Revenue. As the balance amount was not paid withinthe period stipulated, the assessment officer by an order dated 25.7.2014 leviedinterest of Rs.29,13,413/- under Section 220(2) of the Income Tax Act, 1961. Explaining the grounds for non-payment of amount, within time, the petitioner filed apetition under Section 220(2A) of the Act, seeking waiver of interest and by the impugned order dated 16.2.2015, the 1[st] respondent – Principal Commissioner ofIncome Tax, rejected the petition. Hence the writ petition. 3. The impugned order reads as under: “There are no reasonable grounds nor hardship exists in the instant case warrantingwaiver of interest as sought, hence the petition for waiver of interest is rejected.” 4. The claim of the petitioner is that because of the circumstances beyond hiscontrol, which he has mentioned in the petition for waiver, he was unable to pay theamount due, within the period stipulated and that as he satisfies the three conditionsunder Section 220(2A) of the Act, he is entitled to be considered for waiver ofinterest. 5. The learned Standing Counsel for the respondents stated that though theimpugned order does not contain reasons, the Department has filed a detailedcounter affidavit justifying the rejection of the claim of the petitioner for waiver ofinterest and hence, the impugned order does not warrant interference. 6. A perusal of the impugned order, which is extracted above, shows that the1[st] respondent – Commissioner, has not considered the grounds raised by thepetitioner in the petition filed under Section 220(2A) of the Act and has passed anorder bereft of reasons. 7. The settled legal proposition is that the impugned order itself shall containreasons justifying the decision taken and they cannot be supplemented by way ofan affidavit. For better appreciation, the law laid down by the Apex Court in 5. The learned Standing Counsel for the respondents stated that though theimpugned order does not contain reasons, the Department has filed a detailedcounter affidavit justifying the rejection of the claim of the petitioner for waiver ofinterest and hence, the impugned order does not warrant interference. 6. A perusal of the impugned order, which is extracted above, shows that the1[st] respondent – Commissioner, has not considered the grounds raised by thepetitioner in the petition filed under Section 220(2A) of the Act and has passed anorder bereft of reasons. 7. The settled legal proposition is that the impugned order itself shall containreasons justifying the decision taken and they cannot be supplemented by way ofan affidavit. For better appreciation, the law laid down by the Apex Court in MOHINDER SINGH GILL v. CHIEF ELECTION COMMR.[[1]],may be referred: 8. The second equal relevant matter is that when a statutory functionary makes anorder based on certain grounds, its validity must be judged by the reasons so mentionedand cannot be supplemented by fresh reasons in the shape of affidavit or otherwise.Otherwise, an order bad in the beginning may, by the time it comes to court on account ofa challenge, get validated by additional grounds later brought out. We may here drawattention to the observations of Bose J. in Gordhandas Bhanji (AIR 1952 SC 16) (at p.18): “Public orders publicly made, in exercise of a statutory authority cannot be construed inthe light of explanations subsequently given by the officer making the order of what hemeant, or of what he was in his mind, or what he intended to do. Public orders made bypublic authorities are meant to have public effect and are intended to affect the acting andconduct of those to whom they are addressed and must be construed objectively withreference to the language used in the order itself”. 8. Inasmuch as the impugned order is bereft of any reasons and further thesame has not dealt with the contentions raised by the petitioner in his application filed under Section 220(2A) of the Act, and in view of the above facts andcircumstances and the law laid down by Apex Court, the impugned order cannot besustained and the same is hereby set aside. 9. It is made clear that the 1[st] respondent – Principal Commissioner ofIncome Tax, shall consider the petition filed under Section 220(2A) of the Act, byaffording the petitioner an opportunity of being heard and shall pass a reasonedorder in accordance with law. 10. The writ petition is accordingly allowed. No order as to costs. 11. Miscellaneous petitions pending if any, shall stand closed. ----------------------------------------- G.CHANDRAIAH,J ----------------------------------------- CHALLA KODANDA RAM,J DATE:17—08—2015Note: L.R. copy to be marked.AVS [1]AIR 1978 SC 851