Law:

Section:

Section 273A of the Income-tax Act, 1961 - Penalty - Power to reduce or waive - Assessment year 1976-77 - Whether in view of wide variation between income returned by assessee and income assessed, Commissioner was justified in assuming that assessee had not made full and true disclosure of income, and, consequently, in rejecting assessee's application under section 273A - Held, yes FACTS Search was made on 22-2-1977. Returns for the assessment years 1977-78 and 1978-79 were filed on 3-2-1978 and 14-3-1980 respectively. The Commissioner agreed with the assessee that these returns could not be characterised as having been unduly delayed, but even then it could not be said that the assessee had furnished full and true disclosure of the income for those years. For the year 1976-77, income returned was Rs. 20,000. The income ultimately fixed by the AAC was Rs. 45,000, a little over 200 per cent of income returned. For the year 1977-78 income returned was Rs. 21,000, income assessed was Rs. 1,85,200 and income affirmed in appeal was Rs. 1,85,000. The Tribunal set aside the assessed income, but income was finally determined at Rs. 48,000. In the year 1978-79 income returned was Rs. 9,800 but was finally determined at Rs. 45,000 by the Tribunal. The Commissioner, therefore, rejected the assessee's application for waiver or reduction of penalty under section 273 A. On reference: HELD It is evident that it was not a case of marginal variation in the assessment of income that had taken place. This was an aspect which had to be rightly and correctly given due weight by the Commissioner. Explanation to section 273A furnishes a statutory fiction for the purpose of finding out whether there had been full and true disclosure of income. The crux of the matter is, if the particulars relating to income where the excess of income assessed over the income returned is of such a nature as not to attract the provisions of clause (c) of subsection (1) of section 271, there is an imputation of concept of full and true disclosure of income. This is the main aspect which has to be considered by the Commissioner while exercising a discretion under section 273A. The nature of income is the…

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