Law:

Section:

Section 273A of the Income-tax Act, 1961 - Penalty - Reduction/waiver of - Assessment years 1979-80 to 1985-86 - After filing of return by assessee and before completion of assessment, his residential and factory premises were searched under section 132 leading to seizure of documents and account books - With a view to taking advantage of Explanation 2 to section 273A(1), which was operative during that period, assessee filed a disclosure petition within 15 days, as required by Explanation 2, to Commissioner adding that he would agree to such reasonable assessment as might emerge after scrutiny of seized records -Subsequently, after inspection of accounts revised returns were filed, assessments were finalised and taxes paid by assessee accordingly - ITO, IAC and Chief Commissioner recommended to CBDT for waiver/reduction of penalty - CBDT, however, declined to accord approval under section 273A on ground that disclosure made was neither full nor true - Whether in view of fact that assessee undertook to accept assessed income as returned income even if some additions were ultimately made while framing assessment, and liquidated tax demands immediately, it was wrong on part of Board to rely heavily on income returned in revised returns filed after expiry of period of 15 days and thereby decline to accord approval for waiver/reduction of penalty under section 273A - Held, yes FACTS The petitioner filed his return for the assessment year 1984-85, but before the assessment could be finalised, his residential and factory premises were searched under section 132 from23-l-1985 to 25-1-1985. leading to seizure of documents and account books. During this period. Explanation 2 to section 273A(1), inserted with effect from 1-10-1984-which continued up to 24-5-1985 only - was in force. The petitioner took advantage of the Explanation, and filed a petition on 6-2-1985 to the Commissioner making a full and true disclosure of his assets stating that he would agree to such reasonable assessment as might emerge after scrutiny of the seized record. Subsequently, after the inspection of accounts, revised returns were filed on 14-3-1986 and 17-3-1986 and after finalisation of…

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