1986 (3) TMI 76 - HC - Income Tax

Summary

Issues:
1. Application for waiver of penalty under section 273A of the Income-tax Act, 1961.
2. Interpretation of the conditions for entitlement to the benefit under section 273A.
3. Rejection of the application under section 273A by the Commissioner of Incometax.
4. Legality of the Commissioner's decision and relevance of considerations in adjudication.
5. Judicial interpretation of the provisions of a taxing statute and the requirement for strict construction.

Analysis:
The petitioner sought a writ of certiorari to quash the order passed by the Commissioner of Incometax, rejecting his application for waiver of penalty under section 273A of the Income-tax Act, 1961. The petitioner claimed that he met all the conditions under section 273A, including filing the income-tax return voluntarily and in good faith, without the issuance of a notice under section 139(2) of the Act. However, the respondent rejected the application, stating that the petitioner had been assessed to tax for many years and knew the taxability of his income, thus concluding that the return was not filed voluntarily, as required by section 273A.

The High Court, after considering the arguments, held that the penalty imposable on an assessee can be waived under section 273A if the conditions specified are met, without any exclusion for previous assesses. The court emphasized that the provisions of a taxing statute must be strictly construed, and if the requirements of section 273A are fulfilled, the Commissioner must decide on waiving the penalty based on merit in each case. The court cited a previous judgment to support this interpretation.

The court found that the respondent had rejected the application based on irrelevant considerations, leading to an unsustainable order. Consequently, the court allowed the petition, quashed the order, and directed the respondent to reconsider the application under section 273A, taking into account the relevant conditions provided in the Act. The court made no order as to costs, indicating a favorable outcome for the petitioner in seeking the waiver of penalty under section 273A.