TMI Blog1979 (4) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... as due to be filed by the assessee on or before September 30, 1965. The assessee had filed the return only on October 5, 1966. On July 27, 1965, there was direction by the ITO, which is found in the order sheet of the assessment file, to his office to issue notice under s. 139(2), and the notice was stated to have been despatched on July 30, 1965. However, there is no proof of service of the notice on the assessee, nor is there any note in the assessment file that the notice could not be served. Hence, it must be taken for granted that the assessee, on the date of filing the return, namely, October 5, 1966, was not served with any notice under s. 139(2). The assessee had filed the return on October 5, 1966, showing an income of Rs. 47,676. Finally, the ITO had passed an order dated July 25, 1972, determining the income of the assessee at Rs. 85,770 and imposed a tax of Rs. 5,234 which was paid by the assessee. In the meanwhile, the ITO had issued a notice on December 27, 1969, proposing to levy penalty under s. 271(1)(a) for the delay in filing the return and finally levied a penalty of Rs. 9,168 by his order dated December 23, 1972. The appeals preferred by the assessee to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and truly and in good faith all the material facts necessary for the assessment and, therefore, the impugned order is not liable to be quashed. Incidentally, the departmental counsel brought to our notice that the appeals against the levy of penalty have already been dismissed and there is no merit in this writ petition. Section 271(4A) was deleted with effect from October 1, 1975. However, this power to reduce or waive the penalty imposed or imposable and the interest paid or payable has now been conferred upon the Commissioner by s. 273A. In fact, the impugned order was passed under s. 273A(1) on March 24, 1976. Section 273A(1), in so far as it is relevant for the purpose, may be read thus: " Notwithstanding anything contained in this Act, the 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 subsection (1) of section 139; or ...... if he is satisfied that such person (a) in the case referred to in clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... waive the amount of penalty imposed or imposable on the assessee. This power is a discretionary one to be exercised in appropriate cases judiciously and fairly and in the interest of justice. The legal liability of the assessee to pay the imposed penalty is not in dispute, but, however, the Commissioner may take a sympathetic view if the requirements of the provisions of s. 273A(1) are satisfied. The conditions to be satisfied for attracting this provision are : First, the assessee must establish that he has filed the return voluntarily and prior to the issue of a notice to him under sub-s. (2) of s. 139. Secondly, the voluntary return must be one filed in good faith indicating a full and true disclosure of his income. Thirdly, the assessee must have co-operated in any inquiry relating to the assessment of his income. Fourthly, he must have either paid or made satisfactory arrangements for payment of any tax or interest payable in consequence of an order passed in respect of the relevant assessment year. If the aforesaid ingredients of s. 273A(1) are satisfied, the Commissioner of Income-tax has to exercise his discretion either suo motu or on the application of the assessee to red ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded by Mr. P. Rama Rao, the Commissioner is not bound to exercise the discretion always in favour of the assessee in each and every case ; nor can it be said that the discretion vested in the Commissioner under this provision must be exercised only in a particular way. The Commissioner has a statutory duty and obligation to examine the facts and circumstances of each case and exercise his discretion fairly and objectively and arrive at a correct conclusion. This objective examination and satisfaction are necessary because it is a statutory discretion. A careful reading of the requirements or ingredients of this provision shows that Parliament enacted this provision to show some equitable consideration to honest assessees who have not only co-operated in any enquiry relating to the assessment of his income, but also either paid or made satisfactory arrangements for payment of any tax or interest payable by them in respect of the relevant assessment year. He must have, voluntarily and in good faith, made full and true disclosure of his income. The expressions " good faith " and " full and true disclosure of his income " used in s. 273A(1)(a) reveal that the assessee, in the circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld prove beyond doubt that the assessee who requires the Commissioner to exercise the discretion vested in him under s. 273A(1) for any particular year of assessment must comply with the provisions of this section in respect of that assessment year alone. The intendment and object of this section would clearly show that the assessee can avail of the provisions of this section in respect of any assessment year if he has satisfied the requirements thereof for that assessment year, each assessment year being a unit by itself for the purpose of assessment. This relief would be available to the assessees if they comply with the requirements of s. 273A(1) for the particular assessment year although they might not be found to have complied with them all through and for all the assessment years. This view of ours gains support from the decisions rendered in Ghulam Mohd. Sheikh v. CWT [1977] 109 ITR 395 (J K), Madhukar Manilal Modi v. CWT [1978] 113 ITR 318 (Guj), Mahavir Transport Co. Ltd. v. CIT [1978] 113 ITR 360 (Guj) and Shankara Apaya Swami v. WTO [1976] 103 ITR 649 (Kar). Relying upon the unreported decision of a Division Bench of this court in W.P. No. 3769/78 dated 8th Septembe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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