Law:

Section:

Section 271(4A) of the Income-tax Act, 1961 - Penalty - Waiver or reduction of - Assessment year 1970-71 - Assessee filed its return on 27-1-1974 - Out of total period of delay for 15 months ITO condoned delay of 4 months on account of assessee's counsel being busy in general elections, but for remaining period of delay, imposed penalty under section 271(1)(a) - On appeal, Commissioner upheld levy of penalty on grounds that assessee had been assessed to tax for a number of years prior to assessment year in question and that assessee could not be considered to have made any voluntary disclosure - Whether Commissioner failed to exercise jurisdiction by not giving benefit of section 271(4A) to assessee treating him as an old assessee, and therefore, his order was liable to be quashed - Held, yes FACTS For the assessment year 1970-71, the assessee-firm filed its return on 27-1-1974. The assessee explained that the delay of 15 months in filing its return within the prescribed time was caused firstly due to its counsel being away in general elections and, secondly, due to its partners having left business activities due to Indo-Pak war in December 1971. The ITO while condoning a delay of four months, imposed penalty for the remaining period for late filing of return under section 271(1)(a). The assessee made an application for condonation of delay and condoning the penalty under section 271(4A) to the Commissioner. The Commissioner held that the assessee had been assessed to tax for a number of years prior to the assessment year in question and that by filing belated return under section 139(1), the assessee could not be considered to have made any voluntary disclosure. He, therefore, rejected the assessee's prayer. On writ : HELD In the instant case, the order of the Commissioner suffered from two infirmities. Firstly, because the approach of the Commissioner was not in accordance with the provisions of section 271(4A ) and secondly, the order was not a speaking order. It was clear that the disclosure was voluntary and a prayer was specifically made by the assessee to the Commissioner after the imposition of penalty by the assessing authority. The assessing…

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