Law: Income Tax Act, 1961

Section: 273A,273A(4)

Income-tax----Penalty---Concealment of income---Waiver of penalty---Conditions precedent---Meaning of "payable" in S.273-A---Assessee can apply for waiver even after paying penalty---Indian Income Tax Act, 1961, S.273-A. A perusal of section 273-A(4) of the Indian Income Tax Act, 1961, makes it clear that for grant of relief the Commissioner is required to consider whether (i) in the facts of the case there would be genuine hardship to the assessee if relief is not granted, and (ii) the assessee has cooperated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him. That would mean that clause (i) of subsection (4) requires consideration of hardship and clause (ii) requires that the Commissioner should verify that the assessee has cooperated (a) in any inquiry relating to the assessment or (b) in any proceeding for the recovery of any amount due from him. The second part of clause (ii) would certainly indicate that if he has cooperated in the recovery of the amount of penalty payable by him, then it cannot, be said that the Commissioner would have no jurisdiction to entertain the assessee's application. The conditions precedent for exercise of quasi-judicial power under section 273-A(4) are the two objective criteria mentioned in clauses (i) and (ii) and not whether the assessee has or has not paid penalty. The word "payable" is somewhat indefinite in import and its meaning must be gathered from the context in which it occurs; "payable" generally means that which should be paid. In the context of section 273-A the word "payable" would mean that the assessee is liable to pay a particular sum as penalty. Even if the liability to pay penalty is discharged, it would not mean that he is not entitled to get relief under section 273-A as otherwise no assessee would pay the penalty till the -proceedings under section 273-A are over. Held, that the commissioner was not justified in rejecting the assessee's application for waiver of penalty on the ground that section 273¬A(4) was not available as the assessee had already paid the amount of penalty. Kherunnisa Allibhai (Smt.) v. C.I.T. (1978) 113 ITR 443 (Guj.); New Delhi…

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