ORDER
TIRATH S. THAKUR, J.
This writ petition calls in question the validity of an order passed by the Respondent CIT declining the petitioner’s prayer for waiver of interest levied under ss. 139(8) and 217 of the IT Act, 1961. The CIT was of the view that since the petitioner had failed to deposit the admitted tax payable on the income disclosed, he could not claim waiver or reduction in the amount of interest levied, the deposit being a condition precedent for any such waiver to be permissible.
2. For the asst. yr. 1987-88, the petitioner filed a return on 10th Nov., 1989 declaring a total income of Rs. 13,220. This was followed by a revised return filed on 16th March, 1990, disclosing an income of Rs. 1,26,220. The return was further revised by the petitioner on 22nd April, 1990, disclosing an income of Rs. 2,69,880. An amount of Rs. 1,09,190 was payable as tax on the income disclosed in the second revised return, as against which the petitioner paid along with the second revised return a sum of Rs. 1,02,180 only leaving a balance of Rs. 7,010 unpaid. The assessment was completed by the assessing authority under s. 143(3) and a demand for the balance amount of tax raised on 29th of March, 1990. The petitioner paid the balance amount on 13th of April, 1990. The assessing authority levied interest amounting to Rs. 36,821 under s. 138(8) and Rs. 47,556 under s. 217 of the Act, for the waiver whereof the petitioner filed an application before the CIT under s. 273A on 25th of April, 1990. By his order dt. 5th of Aug., 1992, the CIT dismissed the application on the ground that the petitioner had failed to comply with the basic requirement of payment of tax on the amount disclosed and was, therefore, not entitled to claim either waiver or reduction of the amount of interest levied. Aggrieved, the petitioner has filed this petition as already indicated earlier.
3. Mr. Rao, counsel appearing for the petitioner, contended that payment of the amount of tax due on the income disclosed by the assessee at the time of filing of the return was not one of the requirements stipulated by s. 273A nor could the non-payment of any such admitted tax amount be made a basis for rejecting the petitioner’s request for waiver. He submitted that so long as the petitioner had paid the amount of tax pursuant to an order of assessment made under the Act, the requirement of payment of the tax amount must be deemed to have been satisfied no matter such payment was not made simultaneously with the filing of the return. There was, according to the learned counsel, a contradiction in the provisions of s. 273A(1)(c) and the requirement stipulated in the section, where under the assessee ought to have co-operated in the enquiry relating to assessment of his income and either paid or made satisfactory arrangement for the payment of tax or interest payable in consequence of an order passed under the Act. The argument was that whereas cl. (c) of s. 273A(1) required not only a voluntary disclosure made in good faith, but the deposit of the tax on the income so disclosed, the further requirement of the 1 assessee having paid or made satisfactory arrangements for the payment of any tax due in consequence of an order passed under the Act’ implied that the payment of tax could be even in consequence of an assessment order made under the Act. The provision contained in s. 273A being a piece of beneficial legislation, argued the learned counsel, the same ought to be liberally construed and the benefit of any doubt or anomaly given to the taxpayer. Reliance was in support placed by Mr. Rao upon among others, Parshottam Nagindas & Ors. vs. B.R. Adwalpalkal CIT (1996) 131 CTR (Guj) 338: (1996) 218 ITR 392 (Guj), CIT vs. JK. Hosiery Factory (1986) 52 CTR (SC) 142 – (1986) 159 ITR 385 (SC) and CIT vs. Sundaram Clayton Ltd. (1988) 74 CTR (Mad) 127
(1989) 179 ITR 593 (Mad)
4. On behalf of the Respondents, Mr. Seshachala called in aid a Single Bench decision of this Court in Diamond Glass Agencies vs. CIT & Ors. (W.P. Nos. 21705/1996 & connected matters) disposed of on 18th Nov., 1996, where Bhaktavatsalarn, J, has while dealing with a similar argument held, the payment of admitted tax amount as an essential requirement for the assessee to be able to invoke s. 273A. It was argued that the requirement of depositing the admitted tax amount was an essential requirement, which was in no way diluted let alone contradicted by any other provisions contained in s. 273A. The so-called contradiction and anomaly did not according to Mr. Seshachala exist nor was there any room for any interpretative process rendering an important statutory requirement ineffective.
5. Sec. 273A to the extent the same is relevant for our purposes and as it stood during the relevant period was as under :
“Sec. 273A:-(1) Notwithstanding anything contained in this Act, the Commissioner may, in his discretion, whether on his own motion or otherwise;
(i) xxx xxx xxx
(ii) xxx xxx xxx
(iii) reduce or waive the amount of penalty imposed or imposable on a person under sub-s. (8) of s. 139 or s. 215 or s. 217 or the penalty imposed or imposable under s. 273, if he is satisfied that such person;
(a) xxx xxx xxx
(b) xxx xxx xxx
(c) in the case referred to in cl. (iii), has prior to the issue of a notice to him under sub-s. (2) of s. 139 or where no such notice has been issued and the period for the issue of such notice has expired, prior to the issue of notice to him under s. 148, voluntarily and in good faith made full and true disclosure of his income and has paid the tax on the income so disclosed;
and also has, in the case referred to in els. (a), (b) and (c) co-operated in any enquiry relating to the assessment of his income and has paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year.”
6. A plain reading of the above would show that the power to reduce or waive the amount of interest paid or payable could be invoked by the assessee upon satisfaction of the conditions stipulated in cl. (c) above. One of the conditions prescribed is that the assessee should not only have voluntarily and in his good faith made full and true disclosure of his income but should have paid the tax on the income so disclosed. This requirement, it is evident, is prescribed as a condition precedent and cannot, therefore, be said to be either optional or inconsequential. The scheme underlying the provision is that it is only if the assessee, has voluntarily and in good faith made a full and true disclosure of his income and has also paid the amount of tax due on such income that he can qualify for claiming the benefit of waiver or reduction in the amount of interest payable under s. 139(8) and s. 217. The payment of any such admitted tax amount as a condition precedent for the assessee to invoke the beneficent provisions of s. 273A is even otherwise rational and fairly understandable. The Parliament does not appear to have favoured the grant of concession by way of reduction or waiver of interest recoverable to an assessee, who has not paid what is payable even according to his own admission as per the disclosures made in the return. The requirement that the assessee should have paid the entire amount due on the income disclosed can, therefore, be rightly held to be a condition precedent for the assessee to satisfy before he can invoke the power of reduction or waiver vested in the CIT. The words “either paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passed under this act appearing in s. 273A do not in my opinion bring about any conflict with the provisions of cl. (c) supra or create any anomaly. These words do not obviously refer to the amount of tax, which is payable by the assessee on the basis of the income disclosed by him. They refer to any amount other than the one, which is payable by the assessee on the basis of his own disclosure. The submission made by Mr. Rao was that there is no situation, in which any amount may become payable in terms of an order made under the Act in cases where the disclosure is full and true. He urged that once an additional amount of tax is held payable by the assessee was neither full nor true (sic). In other words, the payment of admitted tax could according to the learned counsel as well have been made by the assessee after an order of assessment is made under the Act and within the time stipulated for doing so. I cannot subscribe to that line of reasoning. The words “in good faith, full and true disclosure” appearing in cl. (c) relate to the disclosure of the income of the assessee and not necessarily benefits or deductions which he may have claimed in the nature of depreciation, expenses, etc. An additional amount of tax may, therefore, become payable by an assessee even in cases where the disclosure of income by him has been accepted as full, but the deductions claimed are disallowed. In any such event, over and above the amount that the petitioner has admitted as payable as per the return filed by him, there may be certain additional amounts that may be held due from him on account of tax or interest. The words “paid or made satisfactory arrangements for the payment of any tax or interest, therefore, refer to tax or interest payable over and above what is the admitted amount as per the return filed by the assessee. Seen thus, there is no conflict or anomaly between the provisions of cl. (c) and the remaining provisions so as to require any harmonisation by a process of interpretation. The two requirements, one under cl. (c) and the other regarding payment of tax or interest held payable in consequence of an order are independent of each other, both of which must be satisfied before the assessee can claim benefit of waiver or reduction. To the same effect is the view taken in B. Thangammal vs. CIT (1996) 131 CTR (Mad) 8: (1995) 215 ITR 261 (Mad)7 and S.M. Ziaddin vs. CIT (1996) 131 CTR (Mad) 229: (1993) 203 ITR 136 (Mad) by two Single Benches of the High Court of Madras. In the later of the said two decisions, the Court has observed thus :-
“The conditions precedent for the exercise of the discretion for wavier or reduction of the penalty or interest are those mentioned in cls. (a), (b) and (c) of s. 273A(1) of the IT 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 CIT under s. 273A. ”
7. The decision of Bakthavatsalam, J, relied upon by Mr. Seshachala also toes the same line.
8. In Parshottam Nagindas & Ors. vs. B.R. Adwalpalkar (supra) heavy reliance whereupon was placed by Mr. Rao, the Court has proceeded on the assumption that there is no provision requiring the assessee to make payment of the admitted tax amount. It was held that in the absence of any requirement of making the payment of the admitted tax, it was not possible to interpret the said provision to mean that such payment should have been made at the time of making the disclosure. A payment made any time before the power under s. 273A was invoked could also in the opinion of the learned Judges, who decided the case suffice. With utmost respect, I find it difficult to fall in line. The provisions contained in s. 273A do not in my opinion admit of the interpretation placed upon the same by the Gujarat High Court. The requirement of paying the amount of tax due on the amount disclosed in the return cannot be made infructuous by holding that such a payment could as well have been made any time before the power to waive is invoked by the assessee. The rationale behind the requirement is to encourage proper payment of the amount of tax, which is according to the assessee’s own showing due and recoverable from him. It only means that those who pay promptly can claim the benefit of waiver of interest also. An interpretation, according to which payment of even the admitted tax amount is not necessary till such time the power to reduce or waive the interest levied under ss. 139(8) and 217 is invoked will have the effect of negating the very purpose underlying the provision. Any such interpretation has therefore to be eschewed. Since the scheme underlying the provision does not envisage a benefit except in cases that fall within the four corners prescribed by it the beneficial nature of the legislature can be of no help. Payment of the admitted amount of tax along with the return being one of the requirements, non-compliance with the same would take the case of the assessee out of the purview of the said provisions. The CIT was in that view perfectly justified in rejecting the petitioner’s application. There is no merit in this Petition, which fails and is hereby dismissed, but in the circumstances, without any orders as to costs.