9911796707
TMI Blog1979 (9) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment of the petitioner at Rs. 35,000 for the year 1972-73 and Rs. 39,000 for the year 1973-74. He also directed that notices be issued to the petitioner to show cause why penalty under s. 271(1)(a) for late filing of the return for the year 1972-73 and that under s. 273(b) of the I.T. Act for not paying the advance tax for the years 1972-73 and 1973-74 be not imposed. Eventually, as the ITO was not satisfied that there was any reasonable cause for the petitioner not to file its income-tax return for the year 1972-73 within time, he imposed upon it a penalty of Rs. 2,544. Likewise as he was not satisfied that there was any reasonable cause for the petitioner for not furnishing an estimate of the advance tax payable by it in accordance with the provisions of sub-s. (3) of s. 212, in either of the two assessment years, he imposed upon it a penalty of Rs. 1,733 for each of the two years. The petitioner then made an application under s. 271(4A) of the I.T. Act, as it stood then, to the Commissioner, praying that the aforementioned penalties imposed by the ITO be waived but then at a later stage it pressed the prayer made by it under s. 273(1) of the I.T. Act. The Commissioner ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to furnish under sub-section (1) of section 139 ; or (ii) reduce or waive the amount of penalty imposed or imposable on a person under clause (iii) of subsection (1) of section 271 ; or (iii) reduce or waive the amount of interest paid or payable under sub-section (8) of section 139 or section 215 or section 217 or the penalty imposed or imposable under section 273, if he is satisfied that such person, (a) in the case referred to in clause (i), has, prior to the issue of notice to him under sub-section (2) of section 139, voluntarily and in good faith made full and true disclosure of his income; (b) in the case referred to in clause (ii), has, prior to the detection by the Income-tax Officer, of the concealment of particulars of income or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, made full and true disclosure of such particulars; (c) in the cases referred to in clause (iii), has, prior to the issue of notice to him under sub-section (2) of section 139, or where no such notice has been issued and the period for the issue of such notice has expired, prior to the issue of notice to him under section 148, vol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case may be, does not necessarily imply that in all the cases a disclosure of the true and full income should have been made at the time of filing of the initial return or that once a return showing an income which may not be true and full has been filed by the assessee, any subsequent disclosure of true and full income by him before the issue of notice under s. 139(2) or that under s. 148, can be taken into account for considering whether or not a penalty can be waived under s. 273A of the Act. So long as the assessee has, in good faith, made a true and full disclosure of this income either before the issue of a notice under s. 139(2) or s. 148 of the Act, as the case may be, even if such disclosure has been made at the time of assessment, condition No. 1 would be satisfied and if all other conditions mentioned in the section co-exist, the Commissioner would have ample jurisdiction to deal with the matter in his discretion. Further, the Explanation added to the second proviso provides that for the purposes of the sub-section, a person shall be deemed to have made a full and true disclosure of his income or of the particulars relating thereto, in any case, where the excess of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... good faith, made full disclosure of his net wealth." The meaning and "scope of the expression, " voluntarily and in good faith made full disclosure of his net wealth " as used in the aforesaid section, came up for consideration before a Division Bench of this court in the case of Hasan Ahmad Khan v. CWT [1975] 99 ITR 414, which made the following observation (pp. 417, 418): Section 18(2A) provides that, if along with certain other matters, the Commissioner is satisfied that the assessee had in good faith made full disclosure of his net wealth, he could, in his discretion, waive the amount of minimum penalty imposable on the assessee this condition cannot, in our opinion, be split up into two independent conditions in the manner suggested by the learned counsel for the Department; for in a case where the disclosure of net wealth made by the assessee is ultimately found to be correct the question whether it was bona fide or not cannot arise. On the other hand, where it is found to be incorrect, according to the counsel for the Department the question of bona fides would be irrelevant. In either case, the condition that the assessee should have acted in good faith will have no si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that returned or disclosed by the assessee, it is apparent that the assessee has made a full and true disclosure of income and no question of lack of good faith can possibly arise. In such a case, the assessee will be deemed to have made a full and true disclosure of his income in a bona fide manner and if other conditions under s. 273A are satisfied, the Commissioner would have jurisdiction to consider the assessee's application for waiver of penalty imposed or imposable either for late filing of the return or for not paying the advance tax. It is only in a case, where the ultimate assessment made by the I.T. authorities is more than the income disclosed by the assessee that the question whether the assessee honestly believed the income disclosed by him to be true and full can possibly arise. However, as provided in the Explanation added to s. 273A, the law presumes that every disclosure of income is true and full, unless the excess of the assessed income over the returned income can be said to be the income which had either been concealed by the assessee or the particulars whereof had been inaccurately furnished by him. It is only in a case where to begin with the assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that while making the order, he had taken the Explanation to s. 273A, also into consideration. However, he did not give any reason as to why he considered that the excess of income assessed over and above that returned by the assessee, amounted to its being concealed income or income particulars whereof had been inaccurately furnished. We, therefore, find that the Commissioner has not looked into the matter from a correct point of view, and the impugned order cannot be allowed to stand. The matter has to go back to the Commissioner for being decided afresh and in accordance with law. Before parting with the case, we would like to point out that in his counter-affidavit, the Commissioner has asserted that in this case, the assessee did not disclose his income voluntarily and as such the condition for considering the application for waiving the penalty as laid down in s. 273A of the Act did not exist. As already stated, the impugned order proceeds on the assumption that the disclosure of income made by the petitioner was voluntary. We find that the Commissioner has not given any such finding, as is now being asserted by him in the counter-affidavit, in the impugned order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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