JUDGMENT
1. This petition under Article 226 of the Constitution has been filed by Barnwal Abhushan Kendra which is a registered firm doing business at Varanasi.
2. For the assessment year 1980-81, the petitioner did not submit the return within time. It was submitted by it voluntarily before initiation of the proceedings under Section 139(2) or 148 of the Income-tax Act. After imposition of interest and penalty, the petitioner applied for waiver of the same. This application has been rejected by the impugned order dated October 14, 1987. While rejecting the application, the Commissioner of Income-tax held that as the return was filed much beyond the assessment year in which this was due, that is, after the lapse of the period when the notice under Section 139(2) of the Act could have been issued, the penalty could not be waived. However, the Commissioner of Income-tax waived a part of the interest. Against the aforesaid order, the present writ petition has been filed.
3. In this case, the penalty had been imposed by the Income-tax Officer. Sri S.B.L. Srivastava, learned counsel for the petitioner, contended that the Commissioner of Income-tax committed an error in holding that as the return had been filed by the petitioner beyond the assessment year, that could be a ground sufficient by itself to reject the application for waiver. He relied upon certain rulings of this court as well as others for the submission that the filing of the return beyond the assessment year alone could not be a ground for rejecting the application for waiver. He contended that as the petitioner had filed the same before initiation of the proceedings under Sub-section (2) of Section 139 of the Act and further co-operated in the assessment proceedings as well as paid the tax imposed, the waiver application should have been allowed.
4. We have heard counsel for the Revenue as well and are of opinion that under Section 273A of the Act, the Commissioner, if he found that a case was made out for reduction of the penalty, he could exercise that power. In the instant case, the Commissioner of Income-tax was oblivious of the said power conferred by Section 273A(1)(ii) of the Act which runs as under :
"(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"
5. To us it appears that as a result whereof, the order of the Commissioner of Income-tax suffers from an error requiring us to interfere. He lost sight of the relevant provision. He did not have the relevant consideration while rejecting the application.
6. Consequently, we allow the writ petition and quash the impugned order dated October 14, 1987. The Commissioner of Income-tax shall dispose of the matter afresh after affording opportunity to the petitioner.