Law:

Section:

Section 271(4A) of the Income-tax Act, 1961 - (As it stood prior to 1-10-1975) - Penalty - Reduction or waiver of - Assessment years 1965-66 to 1969-70 - Whether upon receiving application for reduction/waiver of penalty - There was an obligation cast under section 271(4A) on Commissioner to examine case of assessee and satisfy himself as to whether assessee fully satisfied all conditions laid down in clauses (a),(b) and (c) and if any of conditions had not been satisfied, them Commissioner ought to state as to which condition had not been satisfied - Held, yes FACTS Prior to assessment year 1965-66, assessee was not an assessee under the Act. He voluntarily submitted his return of income for the assessment years 1965-66 to 1969-70. The assessing authority issued notices to the under section 271(1) to show cause why penalty should not be imposed on him. On receipt of the said notices, the petitioner made an application before the Commissioner for waiving the penalty under section 271(4A). In the said application the petitioner stated that he had fully satisfied the requisite conditions for exercise of the discretion of the Commissioner for reduction of waiver of the amount of minimum penalty imposable on the petitioner. It was expressly stated that he had filed his returns of income for the assessment years 1965-66 to 1969-70 voluntarily before notices under section 139(2) were issued, that he had co-operated fully in the enquiry relating to the assessment and that he had already paid the tax assessed. The Commissioner by his order rejected the said application merely stating that the conditions for invoking section 271(4A) were not satisfied. On writ HELD The discretion that is vested in the Commissioner under sub-section (4A) is either to reduce or waive the amount of minimum penalty imposable on a person under sub-section (1) of section 271, if the conditions laid down in clauses (a), (b ) and (c) are satisfied. If the said conditions are satisfied, the Commissioner has no discretion to refuse or reduce or waive the amount of minimum penalty imposable, but he is under a statutory duty to exercise his discretion of either reducing or waiving the penalty. In…

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