K.C. Agrawal, J. - (1.) THIS is a petition under Article 226 of the Constitution for quashing the orders of the Commissioner of Income-tax dated 17th September, 1976 (annexure 25), and the order dated 4th September, 1975 (annexure 18).
(2.) THE petitioner is a partnership concern carrying on business at Kanpur. Assessments for the assessment years 1969-70, 1970-71 and 1971-72, were completed in due course. THE petitioner-firm thereafter filed the returns for the assessment years 1972-73 and 1973-74. THEse assessment proceedings were pending completion. On 24th April, 1974, the petitioner filed a disclosure petition disclosing an amount of Rs. 1,25,000 to be assessed in 5 years from the assessment years 1969-70 to 1973-74 in equal amounts of Rs. 25,000 each. THE application also contained a prayer for waiver of the penalties under Section 271(4A) of the Act. On September 20, 1974, a letter was sent by the Commissioner of Income-tax to the petitioner initimating that the application for waiver having been filed only after the detection by the department, the Commissioner intended to reject the application for waiver. A reply was filed by the petitioner on October 4, 1974, reiterating his request for waiver. On September 4, 1975, the Commissioner of Income-tax rejected the application filed on April 24, 1974, and on October 4, 1974, on the ground that as the question for waiver of penalty could arise only when a show-cause notice for the levy of penalty was issued, the applications filed by the petitioner were not maintainable. Subsequently, the assessment order was passed by the Income-tax Officer in respect of the assessment years mentioned above on March 31, 1975. While passing the assessment order, the Income-tax Officer also directed that action under Section 271(I)(c) of the Act would be taken against the petitioner. The petitioner filed two more applications, one on 24th April, 1975, and the other on 31st October, 1975, renewing his request for waiver of the penalty imposable. The first application was filed under Section 271(4A) while the second had been made under the amended Section 273A. As the second application should be deemed to have superseded the first one, which really became infructuous due to the deletion of Section 271(4A) we are concerned in this writ petition only with the second application. This application contained the prayers respecting the waiver of penalties as well as interest. The prayer made is quoted below : "Alternatively the petition may be considered as a fresh petition for the same purpose, be decided on merits and penalties leviable under Sections 271(1)(a), 271(1)(c) and 273(c) as also interest under Section 215 and under Section 217 be waived." The Commissioner of Income-tax rejected the application by the impugned order dated September 17, 1976. Against the aforesaid order the present writ petition has been filed in this court. Before proceeding to decide the case, we wish to extract the relevant provisions of the Act which would assist in deciding the point in issue.
(3.) SECTION 271 deals with failure to furnish returns, comply with notices, concealment of income, etc. The relevant portion of the said section reads : "(1) If the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under this Act, is satisfied that any person- (a) has without reasonable cause failed to furnish the return of total income which he was required to furnish under Sub-section (1) of SECTION 139 or by notice given under Sub-section (2) of SECTION 139 or SECTION 148 or has without reasonable cause failed to furnish it within the time allowed and in the manner required by Sub-section (1) of SECTION 139 or by such notice, as the case may be, or..... (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty....." in the cases mentioned above to the extent indicated by SECTION 273. Section 273A confers power on the Commissioner of Income-tax to reduce or waive the penalty. Sub-section (1) of Section 27-3A lays down thus: "(1) Notwithstanding anything contained in this Act, the Commissioner may, in his discreiion, 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--..... (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;....." ;