Law: Income Tax Act, 1961

Section: 273A

Income-tax------Penalty---Interest---Waiver of---Scope of discretion of Commissioner--¬Delay in filing returns---Cooperation extended to Department and Tax also paid on disclosed income as per directions of Department ---ITO charging interest under S.139(8), Indian Income Tax Act, 1961 and initiating penalty proceedings under S.271(1)(a) of Indian Income Tax Act, 1961--¬Commissioner rejecting petition for waiver of interest and penalty merely on ground that petitioner was a habitual defaulter ---Commissioner to see only whether returns were filed voluntarily and disclosure made in good faith---No proper exercise of discretion by Commissioner---Matter remanded---Indian Income Tax Act, 1961, S.273-A---[Brij Mohan Bhargava (Dr.) v. CIT (1984) 150 ITR 300 (P&H) dissented from]. For the assessment year 1969-70, the assessee filed delayed returns but, however, claimed that the returns were filed voluntarily and in good faith making honest and full disclosure of his income without receiving any notice from the Department and that it had also deposited a certain sum towards tax on the income so disclosed voluntarily. The Income Tax Officer, however, imposed penal interest under section 139(8) of the Income Tax Act, 1961, and also initiated penalty proceedings under section 271(1)(a) for not filing the returns in time. The assessee filed a petition under section 273-A before the Commissioner of Income-tax for waiver of interest and penalty on the ground that it had complied with the conditions for grant of relief under section 273-A. The Commissioner rejected the petition on the grounds that the returns were not filed voluntarily by the assessee, and that the petitioner was a habitual defaulter. On a writ petition: Held; that; under section 273-A all that the Commissioner had to see was whether the returns submitted by the petitioner without notice could be treated as voluntary and whether such disclosure made was in good faith. Both these aspects had escaped the notice of the Commissioner. The Commissioner had taken into consideration irrelevant matters like the petitioner being an assessee for a number of years and yet filing returns after a long delay and the…

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