1982 (7) TMI 68 - HC - Income Tax

Summary

Issues: Application for relief under section 273A of the Income Tax Act based on the Commissioner's refusal to waive penalties and interest for assessment years 1965-66 to 1967-68.

Analysis:
The petitioner, Jagannath Prasad Srivastava, applied for relief under section 273A of the Income Tax Act after the Commissioner refused to waive penalties and interest for the assessment years 1965-66 to 1967-68. The Commissioner accepted relief for the subsequent assessment years but denied it for the mentioned years, citing that the returns were filed beyond the permissible time under section 139(1), 139(2), or 139(4) and required notice under section 148. The petitioner challenged this decision under Article 226 of the Constitution, arguing that the Commissioner did not consider relevant circumstances as required under section 273A. The petitioner contended that the condition precedent for seeking relief under section 273A was not solely based on the timely filing of returns but also included voluntary disclosure of income and cooperation in the assessment process.

The court analyzed section 273A of the Income Tax Act, which allows the Commissioner to reduce or waive penalties and interest under certain conditions, including voluntary disclosure of income, cooperation in assessment inquiries, and payment of taxes. The court noted that the discretion to waive penalties or interest under section 273A is not barred solely based on the late filing of returns under section 139. The court emphasized that the Commissioner must consider all relevant factors before exercising discretion under section 273A, as highlighted in the Division Bench decision of Jakhodia Brothers v. CIT [1978] 115 ITR 61 (All). The court found that the reason given by the Commissioner for refusing relief did not align with the provisions of section 273A.

In conclusion, the court allowed the petition, quashed the part of the Commissioner's order related to the assessment years 1965-66 to 1967-68, and directed the Commissioner to reconsider the matter in accordance with the law and observations made in the judgment. The court also made costs easy for the petitioner.