661/CBDT. - Income Tax - 661/CBDT

INSTRUCTION NO. 661/CBDT Dated : April 15, 1974 Section(s) Referred: 271(4A) , 18(2A) of Wealth Tax Act Statute: Income - Tax Act, 1961 The CIT can interfere under section 271(4A) even during pendency of appeal before the AAC or the I.T Tribunal. However, if the assessee has filed an appeal against the penalty order, he cannot be forced to withdraw it and then only come to the Commissioner under Section 271(4A). The proper course would be for the Commissioner to entertain an application under section 271(4A) and if he is satisfied that all the conditions of this section are applicable he may inform the assessee that he is prepared to reduce/waive the penalty by formal order under section 271(4A) if the appeal is withdrawn. The Commissioner can exercise the discretion under section 271(4A) even after the penalty has been confirmed by an appellate authority, and the penalty order has become final. The Commissioner or Board can exercise discretion under section 271(4A) even after the penalty has been confirmed earlier by the Commissioner or by the Additional Commissioner in a revision application preferred by the assessee under section 264. Whether it is open to the party to go up in appeal after the Commissioner of Income-tax had declined to interfere under section 271(4A) is primarily a matter for the assessees themselves to determine and the matter may be left to be decided by the appellate authorities. It would be open to the Commissioner to pass an order under section 271(4A) after he had rejected an earlier application from the assessee under this section on the ground that he had no jurisdiction to entertain it, a penalty having already been imposed by the Income-tax Officer. This would not be a case of review of an original order, for strictly speaking, he had passed no order on the earlier application except to hold that he was not competent to dispose of it. Now that he has realised that he has jurisdiction, it is open to him to decide the application on merits. So long as the concealment disclosed by the assessee has not been detected by the Income-tax Officer and other conditions stipulated in Section 271(4A) are satisfied, the Commissioner can exercise the discretion under section 271(4A) in a case where the assessment has been completed and the assessee comes forward and makes an application under section 271(4A), declaring therein some income which was not shown in the original return. The law as it stands at present does not lay down any time limit for filing an application under section 271(4A). It would be open to the authority exercising the discretion under section 271(4A) to come to a decision in each individual case taking into account all relevant circumstances including delay, if any on the part of the applicant. These clarifications would mutatis mutandis apply to section 18(2A) of the Wealth Tax Act, 1957, as well.