Law:

Section:

Section 273A of the Income-tax Act, 1961 - Penalty - Waiver or reduction of - Assessment years 1976-77 to 1981-82 - Assessee-firm Tiled its returns late and ITO, therefore, imposed penalty under section 271(1)(a) and also charged interest under section 139(8) - Assessee made an application under section 273A for waiver or reduction of interest as well as penalty -Thereafter assessee filed revised returns for all years under Voluntary Disclosure Scheme and addition was made to income so returned only in respect of interest paid to a proprietary concern of one of partners of assessee - Particulars of interest payment were also furnished during original assessment - Whether order of Commissioner rejecting assessee's application under section 273A on ground that assessee had not voluntarily and in good faith made full and true disclosure of income, was bad in law and required to be quashed - Held, yes FACTS For the assessment years 1976-77 to 1981-82 the assessments of the assessee-firm were completed under section 143(3) and since the returns were filed late the ITO charged interest under section 139(8) and also imposed penalty under section 271(1)(a). The assessee made an application under section 273A for reduction/waiver of interest. Subsequently, the assessee filed revised returns for the aforesaid years under the Voluntary Disclosure Scheme. The only addition made to the income in the revised returns was that of interest paid to a proprietary concern of one of the partners of the assessee-firm. The particulars of payment of interest to the aforesaid concern were furnished during the original assessment proceedings with a note that this amount of interest was not required to be added under section 40(b). Reassessments were completed accepting the revised returns. The Commissioner held that the fact that the assessee had filed revised returns under the Voluntary Disclosure Scheme was itself a proof of the fact that the assessee had not voluntarily and in good faith made a full and true disclosure of income. He, therefore, rejected the assessee's application under section 273A. On writ: HELD In the instant case the Commissioner failed to consider a relevant and…

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