TMI Blog1987 (2) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... nitiated penalty proceedings under sections 271(1)(c) and 273(2)(a) of the Act. Although an appeal was filed by the petitioner against the addition made in its hands, it withdrew the appeal subsequently. After having done so, it approached the Commissioner of Income-tax with a petition under section 273A for reduction and waiver of penalties imposable under section 271(1)(c) and under section 273(2)(a) of the Act. The petition under section 273A of the Act was allowed in part inasmuch as the Income-tax Officer was directed to impose on the petitioner, minimum penalties leviable under the aforesaid two sections. Aggrieved by this order, the present writ petition has been filed on the ground that the Commissioner ought to have waived the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the previous approval of the Board." Before proceeding further, it is necessary to state some more facts. According to the petitioner, in withdrawing the appeal, it was prompted and motivated on account of a circular bearing No. 451 (F. No. 225/86/85-IT(A-II), dated February 17, 1986-[1986] 158 ITR (Statutes) 135), issued by the Ministry of Finance regarding declaration of higher income or wealth. The petitioner has annexed (vide annexure to the writ petition) a copy of certain circulars and clarifications issued by the Central Board of Direct Taxes between September 20, 1985, to April 8, 1986. According to the petitioner's case, by means of these circulars and clarifications, it was given out that if a taxpayer discloses its curr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e taken as entirely voluntary. " The grievance of the petitioner is that in view of the answer to question No. 28 extracted above, the petitioner was entitled to complete exoneration from the imposition of penalties leviable on account of the additions made in the petitioner's bands which were being contested in appeal but given up as a result of its withdrawal. Section 273A(4) empowers the Commissioner that he may, on an application made by an assessee and after recording his reasons, reduce or waive the amount of any penalty payable by the assessee under the Income-tax Act, or stay or compound any proceeding for the recovery of any such amount on his being satisfied that non-waiver or non-reduction of penalty would cause genuine har ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an order. This must be done to the satisfaction of the Commissioner of Income-tax. He must also satisfy the Commissioner that he co-operated in an enquiry relating to his assessment or in proceedings for the recovery of any amount due from him. From a perusal of the impugned order, it does not appear that the petitioner made any such attempt. There is no whisper of any hardship, much less a genuine hardship caused to the petitioner. There is also nothing on the record to suggest that the petitioner had co-operated in any inquiry relating to its assessment. For the compliance of requirements contemplated by sub-section (4) of section 273A, the petitioner merely relied upon the circular under which it withdrew its appeal. The Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income. Likewise, under section 273(2)(a), an assessee can be subjected to a penalty which shall not be less than ten per cent. but shall not exceed one and half times the amount by which the tax actually paid during the financial year immediately preceding the assessment year under the provisions of Chapter XVII-C falls short of 75% of the assessed tax as defined in subsection (5) of section 215, or the amount which would have been payable by way of advance tax if the assessee had furnished a correct and complete statement in accordance with the provisions of clause (a) of subsection (1) of section 209A, whichever is less. It is significant to note that the expression used in the clarification to question No. 28 (extracted above) is " i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , while in another case, a partial reduction of penalty alone may meet the ends of justice. In our opinion, under the aforesaid circular, when an appeal is withdrawn by the taxpayer and he makes a declaration before the administrative Commissioner, this gesture on his part will be treated as an exonerating circumstance calling for a liberal view in the matter of penalties. It is possible that in the petitioner's case, another Commissioner may have taken a more liberal view and may have directed the imposition of penalties even less than the minimum prescribed, or may have completely waived those penalties. This, however, does not justify any interference with the order of the Commissioner of Income-tax at our hands. We do not see any err ..... X X X X Extracts X X X X X X X X Extracts X X X X
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