1. On 19th August, 1972, petitioner, Jagannath Prasad Srivastava, made an application seeking to disclose his income for the assessment years 1965-66 to 1972-73, and subsequently filed the requisite returns on 15th December, 1972. The petitioner also moved the Commissioner under Section 271(4A) requesting him to waive the amount of penalty imposable on him under Sections 271(1)(a) and 273(b) and interest chargeable under Sections 139 and 217 of the I.T. Act. The Commissioner, vide his order dated 36th March, 1978, accepted the plea of the petitioner in so far as the assessment years 1969-70 to 1972-73 were concerned, but he refused to grant relief to him in respect of assessment years 1965-66 to 1967-68. To quote in his own words, reason given by the Commissioner for refusing relief to the petitioner in respect of the aforementioned years was as follows :
'The returns for the assessment years 1965-66 to 1967-68, though filed voluntarily at the time of disposal were actually filed beyond the time permissible under Section 139(1), 139(2) or 139(4). The returns for these years had to ,be regulated by the issue of notice under Section 148. For these three years, therefore, one of the necessary conditions for waiver, namely, that the returns which form the subject-matter of assessment should have been filed prior to the issue of a notice by the Department is not satisfied. The petition for these three years is, therefore, dismissed...... '
2. Aggrieved, the petitioner has approached this court for relief under Article 226 of the Constitution in so far as the aforementioned portion of the order of the Commissioner is concerned.
3. Learned counsel for the petitioner submitted that the reason given by the learned Commissioner for refusing to grant relief to him under Section 273A is not at all relevant. The Commissioner has failed to apply his mind to relevant circumstances 'on which he was required to exercise his discretion while considering an application for relief under Section 273A of the I.T. Act.
4. A perusal of the order of the Commissioner discloses that after finding that the petitioner had filed his return voluntarily in respect of these three years, he refused relief to him on the ground that the said returns had not been filed by the assessee within the limitation prescribed either under Section 139(1), 139(2) or 139(4) of the I.T. Act. According to him it was a condition precedent for the assessee to have filed returns within theperiod of limitation prescribed by either of the three sections mentioned above before he could request the Commissioner to exercise his discretion under Section 273A, which runs thus :
' (f) Notwithstanding anything contained in the Act, the Commissioner may, in his discretion, whether on his own motion or otherwise,--
(i) reduce or waive the amount of penalty imposed or imposable On a person under Clause (i) of Sub-section (1) of Section 271 for failure, without reasonable cause, to furnish the return of total income which he was required 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 Sub-section (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 a 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 a 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, voluntarily and in good faith made full and true disclosure of his income and has paid the tax on the income so disclosed,
and also has, in all the cases referred to in Clauses (a), (b) and (c), co-operated in any enquiry relating to the assessment of his income and had either paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year...... '
5. A perusal of the section shows that under it an exercise of the discretion for reducing or waiving the amount of penalty and interest specified therein is inhibited by the conditions like the Commissioner being satisfied that the assessee had filed the return voluntarily and that in certain cases the disclosure of the income has been made in a bona fide manner and in good faith and further that in all such cases the assessee had cooperated in any inquiry relating to the assessment of his income and had also paid or made satisfactory arrangements for payment of tax or interest payable in consequence of an order passed under the Act in respect of the relevant assessment year. The section nowhere provides that the discretion of the Commissioner to waive any amount of penalty or interest under Section 273A is barred merely because the assessee did not file his returns within the period prescribed either under Sub-section (1), (2) or (4) of Section 139 of the I.T. Act. It appears that although the Commissioner has recorded a finding that the returns filed by the assessee in respect of the years in question were voluntary, he did not apply his mind to other relevant factors for exercising discretion under Section 273A. The reason for which the Commissioner refused' to exercise discretion is not one which is contemplated by Section 273A of the I.T, Act. In this view we are fortified by a Division Bench decision of this court in the case of Jakhodia Brothers v. CIT : 115ITR61(All) .
6. In the result, the petition succeeds and is allowed. The part of the order of the Commissioner dated 15th March, 1978 (annex. 5 to the writ petition), in so far as it relates to the assessment years 1965-66 to 1967-68 is quashed and the Commissioner is directed to re-consider the matter afresh in accordance with law and in the light of the observations made above. In the circumstances, costs are made easy.