TMI Blog2008 (8) TMI 520X X X X Extracts X X X X X X X X Extracts X X X X ..... and in good faith like present one, as those were filed even prior to the notice or any such demand. The rejection of the application under section 273A was not valid. Thus allow the petition. - 1787 of 1994 - - - Dated:- 7-8-2008 - ANOOP V. MOHTA, PANGARKAR C. L. JJ. G.B. Lohia and R.S. Agrawal for the petitioner. A.S. Jaiswal for the respondent. JUDGMENT The judgment of the court was delivered by Anoop V. Mohta J.- The petitioner has challenged the order dated October 21, 1993, passed by the Commissioner, Income-tax, Vidarbha Region, Nagpur whereby the interest under section 139(8) of the Income-tax Act (for short "the Act") and penalties under section 271(1)(a) for the assessment years 1985-86 to 1989-90 have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 273A(5) of the Act. 4. The relevant section of the Act, i.e., 273A is reproduced as under : "273A. Power to reduce or waive penalty, etc., in certain cases.- (1)Notwithstanding anything contained in this Act, the Chief Commissioner or Commissioner may, in his discretion, whether on his own motion or otherwise,- (i) reduce or waive the amount of penalty imposed or imposable on a person under clause (i) of sub-section (1) of section 271 for failure, without reasonable cause, to furnish the return of total income which he was required to furnish under sub-section (1) of section 139 ; or (ii) reduce or waive the amount of penalty imposed or imposable on a person under clause (iii) of sub-section (1) of section 271 ; or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this sub-section, a person shall be deemed to have made full and true disclosure of his income or of the particulars relating thereto in any case where the excess of income assessed over the income returned is of such a nature as not to attract the provisions of clause © of sub-section (1) of section 271. Explanation 2.-[Inserted by TLA Act, 1984, with effect from October 1, 1984 and omitted by the Finance Act, 1985, with effect from May 24, 1985.]" 5. The Division Bench of the Bombay High Court in Laxman v. CIT [1988] 174 ITR 465 (Bom) ; [1989] 75 CTR (Bom) 76 has explained the scheme and purpose of the section in the following words (page 474) : "On behalf of the respondent, it was contended that the power under section 273A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntary disclosure, and as such the order of the Commissioner was quashed and set aside and the matter was remanded to decide the application on the merits. 8. In Shrikrishna S. Bhagwat v. S. N. Soni, CIT [2004] 270 ITR 186 (Bom), this court while considering sections 139(8), 217 and 273(1)(b) and specially section 273A has observed as under (page 191) : "Dissection of the above provisions would spell out the condition precedent for exercise of discretion to waive the penalty or interest under section 273A of the Act, which can be catalogued as under : (a) voluntary disclosure of income before issuance of notice under section 139(2) ; (b) making of full and true disclosure of the income in good faith ; (c) co-operation in the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 591 (Bom), this court has considered the power of the Commissioner to grant waiver as a one-time measure can grant relief with regard to any number of assessment years based upon section 273A(3) of the Act. 11. In the present case, there is no dispute that the return was filed before any demand notice was issued by the Department. The returns were admittedly filed late but considering the scheme of section 273A as explained and as all the ingredients are available, the concerned respondent ought to have considered the case in view of the scheme and purpose of section 273A as observed above. In our view, all those ingredients are available in favour of the petitioner. 12. There is amendment to section 273A of the Act, with effect from A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not arbitrarily. The Commissioner, essentially after applying his mind to the facts and circumstances of the case needs to pass a speaking and reasoned order after taking into consideration the scheme and object of section 273A including the elements like voluntary act of filing return in good faith ; full and true disclosure of income ; payment of the tax ; and co-operation. Once the case is made out for waiver/reduction, the Commissioner needs to exercise the powers in favour of the assessee. 15. The reason given by the respondent to reject the petitioner's application is insufficient and there is failure to consider all the elements to exercise the power and discretion as contemplated under the scheme of section 273A. The late filing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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