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TMI Blog2004 (1) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... en is whether the voluntary disclosure is prior to the detection by the Assessing Officer and in the present case that condition is fulfilled by the assessee. Therefore, the Commissioner of Income-tax was not justified in declining to exercise powers under section 273A - - - - - Dated:- 21-1-2004 - Judge(s) : V. C. DAGA., J. P. DEVADHAR. JUDGMENT The judgment of the court was delivered by J.P. DEVADHAR J. - The challenge in this petition is to the order passed by the Commissioner of Income-tax, Nasik, declining waiver of interest and penalties levied on the assessee under section 273A of the Income-tax Act, 1961. The petitioner (hereinafter referred to as "the assessee") and her husband are doctors practising as opthalmologists ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1988-89, both the assessee and the Assessing Officer sought instructions from the Deputy Commissioner of Income-tax under section 144A of the Income-tax Act. The Deputy Commissioner in his directions dated March 19, 1991, took note of the fact that the Assessing Officer did not know of the existence of the deposits in question until the assessee's husband met him in person on February 22,1990, and considering that the assessee had approached the Commissioner of Income-tax, granted some relief regarding the quantum of the amount and directed finalisation of the penalty proceedings by taking into account the evidence on both sides meticulously. Thereafter, the Assessing Officer completed the assessment for the assessment year 1988-89 on Mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kar Manilal Modi v. CWT [1978] 113 ITR 318, Mr. Inamdar submitted that merely because the Assessing Officer had initiated enquiries before the voluntary disclosure that does not render the disclosure non-voluntary. Mr. Inamdar relied on the Full Bench decision of the Allahabad High Court in the case of Bhairav Lal Verma v. Union of India [1998] 230 ITR 855 and submitted that if there was no incriminating material with the Department before the disclosure, then the disclosure must be said to be voluntary. It was submitted that in the present case, there was no incriminating material of any nature whatsoever in the possession of the Assessing Officer and it is only on account of the voluntary disclosure made by the assessee through her husban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on both sides. It is well established in law that the conditions precedent required to be fulfilled before exercise of powers to reduce or waive penalty or interest by the Commissioner of Income-tax under section 273A of the Income-tax Act, as it stood then, are: (a) There must be voluntary disclosure of income before issue of notice under section 139(2); (b) The assessee must have made full and true disclosure of income in good faith prior to the detection by the Assessing Officer; (c) The assessee must have co-operated in the conduct of the assessment proceedings; and (d) The assessee must have paid or made satisfactory arrangement for payment of tax or interest payable in consequence of an order passed under the Act with respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose and offer the amount for taxation by the assessee is recorded. Moreover, even the letter dated February 26, 1990, was not issued by the Assessing Officer on the basis of any incriminating documents in the possession of the Assessing Officer, but the same was addressed on the basis of the voluntary disclosure made on behalf of the assessee on February 22, 1990. Under these circumstances, it cannot be said that the disclosure made by the assessee was not voluntary disclosure. Merely because the Assessing Officer had initiated enquiry regarding the assessee's source of income, it could not be said that the disclosure was to avoid or pre-empt adverse exposure or penal action. This court in the case of Laxman [1988] 174 ITR 465 (Bom) has h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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