Law:

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Section 271 of the Income-tax Act, 1961 – Penalty – For failure to furnish returns, comply with notices, concealment of income etc. – Assessment years 1967-68 to 1969-70 – Whether concept of voluntarily filing of return is irrelevant for purpose of grant of relief of waiver or reduction of penalty imposed under section 271(1)(a) except that return was not filed pursuant to notice – Held, yes FACTS For the relevant assessment years the assessee-firm filed its return of income late and so the ITO levied penalties under section 271(1)(a). Thereupon the petitioner filed applications under section 271(4A), before the Commissioner, requesting it to reduce or waive the amount of minimum penalty imposed upon it by the ITO. The Commissioner rejected the assessee's applications on the ground that the return of income filed by the assessee for these years were not voluntary returns. On writ : HELD The Court had an occasion to deal with a case arising under section 18(2A) of the Wealth-tax Act, which provision is identical to the provision of section 271(4A) of the Act under consideration since, reported as Madhukar Manilal Modi v.Commissioner of Wealth-tax [1978] 113 ITR 318 (Guj). In that case also on a similar ground the relief under section 18(2A) was rejected by the Commissioner. On a true construction of section 18(2A), the Court there held that the word "voluntarily" occurring in the relevant statutory provision has to be read with "made full disclosure of his net wealth" and that the concept of voluntary filing of return is irrelevant for the purpose of grant of relief except to the extent that it must be shown that the return was not filed pursuant to a notice issued under section 14(2). Since the language of section 18(2A) of Wealth-tax Act, and section 271(4A) of the Act is in pari materia , so far as the point under consideration was concerned, following the said decision, it was held in the instant case that the relief which the petitioner sought was refused to him on a total misconstruction of the relevant statutory provision which resulted in failure on the part of the Commissioner to exercise the discretion which was vested in him. In the result, the writ…

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