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Section 273A of the income-tax act, 1961-Penalty-Commissioner's power to reduce or waive-Whether order of commissioner reducing quantum of penalty and not waiving penalty in entirety, was valid, even where commissioner had given no reasons for his decision-Held, no Facts The assessee-HUF held shares in certain private limited companies, and though these companies had declared dividends for several years, no intimation was given to the assessee nor was any payment received by it in pursuance of such declaration. On learning that the companies had declared dividends, the assessee voluntarily offered to pay the tax on the dividends and also applied to the Commissioner for waiver of penalty under section 273A. The Commissioner, however, did not waive but only reduced the penalty, but gave no reasons for his decision of not to waive the penalty in its entirety. On writ: Held As held by the Gujarat High Court in Rasiklal Ranchhodbhai Patel v. CWT [1980] 121 ITR 219 , the Commissioner must disclose how his mind worked in law and why he decided not to waive the penalty but to reduce it and how the particular figure was arrived at. In the instant case, the impugned order was entirely silent as to what reasons prompted the Commissioner to reduce the penalty instead of waiving it. The order was, therefore, set aside and the case remitted back to the Commissioner with directions to consider all facts of the matter and exercise the powers under section 273A, setting out the reasons in case the entire penalty was not waived. Case review Rasiklal Ranchhodbhai Patel v. CWT [1980] 121 ITR 219 (Guj.) relied on Case referred to Rasiklal Ranchhodbhai Patel v. CWT [1980] 121 ITR 219 (Guj.). WRIT PETITION NO. 39 OF 1980. S. Ganesh for the Petitioner. R.J. Joshi and Dinesh Parekh for the Respondent. JUDGMENT 1. The petitioner is an assessable person on behalf of Purshottam Thackersey, HUF, of which the petitioner is the karta. The order under challenge in this petition is passed on 21-12-1978 by the Commissioner, under section 273A of the Income-tax Act, 1961 ('the Act'), and the relevant assessment years are 1968-69 to 1975-76. The assessee claims that among the properties held by…

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