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Assessment of penalties under section 271(1)(a) of the Income-tax Act for late filing of returns. Rejection of petitioner's request for reduction or waiver of penalties under section 271(4A) by the Commissioner based on the ground that returns were not filed voluntarily. Interpretation of the statutory provision regarding voluntary filing of returns for grant of relief. Comparison with a similar case under section 18(2A) of the Wealth-tax Act. Analysis: The judgment addressed the issue of penalties imposed on a registered partnership firm for late filing of income tax returns for assessment years 1967-68, 1968-69, and 1969-70 under section 271(1)(a) of the Income-tax Act. The Income-tax Officer levied minimum penalties for the late filings, which were challenged by the petitioner through applications under section 271(4A) seeking reduction or waiver of the penalties. The Commissioner rejected the petitioner's request, citing that the returns were not filed voluntarily as the firm was on General Index Register (GIR) prior to filing the returns, and the firm had been assessed for the previous years. The Commissioner held that voluntary filing was a condition for relief under section 271(4A) and since this condition was not met, the request was denied. The judgment highlighted a previous case under section 18(2A) of the Wealth-tax Act, where a similar ground for rejection of relief was considered. The court noted that the concept of voluntary filing of returns should be read in conjunction with making full disclosure of net wealth, and the voluntary aspect is irrelevant except to establish that the return was not filed in response to a notice. Drawing parallels between section 18(2A) and section 271(4A) of the Income-tax Act, the court concluded that the relief sought by the petitioner was denied due to a misinterpretation of the statutory provision by the Commissioner, leading to a failure to exercise the vested discretion. Consequently, the court allowed the writ petition, directing the Commissioner to reconsider the matter and determine the grant of relief in compliance with the law and the observations made in the judgment. The rule was made absolute, with the Commissioner instructed to bear the costs of the petition.
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