JUDGMENT Satish Chandra, J.
1. For the assessment year 1968-69, the assessee-petitioner was required to file his return of income under Section 139(1) till the 30th September, 1968. The return was actually filed on 2nd March, 1971. The Income-tax Officer imposed a penalty of Rs. 17,749 on the petitioner for the delay in filing the return. Thereupon, the assessee made an application to the Commissioner under Sub-section (4A) of Section 271 of the Income-tax Act, 1961, for waiving the penalty. The Commissioner rejected this application. He stated that the assessee had filed a return of his income declaring it at Rs. 72,315. The Income-tax Officer had assessed the income at Rs. 85,011, which was ultimately reduced by the Tribunal to Rs. 79,873. There was thus a difference of Rs. 7,500 between the returned and the assessed income. He found that the assessee had included inadmissible items on the expenditure side and the transport account to the tune of Rs. 5,000. This was treated as inflated expenses. Ultimately, the Tribunal maintained an addition of Rs. 2,000 under this head. The Commissioner observed :
"It would be impossible for me to hold that this addition of Rs. 2,000 having been made to the income returned by orders of the final fact-finding authority does not represent a variation which violates the provisions of Section 271(4A) inasmuch as the word 'full and complete' are not covering such additions. There are similarly certain other additions in the form of inadmissible expenses which have finally been sustained by the Tribunal. I have, therefore, to hold that though the return was filed voluntarily yet it cannot be considered as full or complete."
2. For this reason he held that the requirements of Section 271(4A) were not complied with. The application was accordingly rejected.
3. Sub-section (4A) of Section 271, in so far as it is material for our purposes, provided:
"Notwithstanding anything contained in Clause (i) or Clause (iii) of Sub-section (1), the Commissioner may, in his discretion-
(i) reduce or waive the amount of minimum penalty irnposable on a person under Clause (i) of Sub-section (1) for failure, without reasonable cause, to furnish the return of total income which such person was required to furnish under Sub-section (1) of Section 139, or
(ii) reduce or waive the amount of minimum penalty imposable on a person under Clause (iii) of Sub-section (1), if he is satisfied that such person-
(a) in the case referred to in Clause (i) of this sub-section has, prior to the issue of notice to him under Sub-section (2) of Section 139, voluntarily and in good faith, made full disclosure of his income; and in the case referred to in Clause (ii) of this sub-section has, prior to the detection by the Income-tax Officer, of concealment of the particulars of income in respect of which the penalty is imposable, 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 ;
(b) has co-operated m any enquiry relating to the assessment of such income; and
(c) has either paid or made satisfactory arrangements for payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year: ........."
4. Sub-Clause (a) of the sub-section provides for two categories of cases. The first part deals with delay in filing the return mentioned in Clause (a) of Sub-section (1) while the latter portion provides for cases included in Clause (c) of Sub-section (1), viz., concealment of particulars of income by furnishing inaccurate particulars of income. In cases of delay in filing the return three facts have to co-exist. The return should be filed voluntarily and in good faith. It should have been filed prior to the issue of notice under Section 139(2) and that the assessee should have made full disclosure of his income in the return actually filed. There is no dispute that the first two conditions are satisfied in this case. There is also no dispute that the further conditions mentioned in Clauses (b) and (c) of Sub-section (4A) were also satisfied.
5. The only question which required consideration at the hands of the Commissioner was whether the assessee had made full disclosure of his income. In this connection the second part of Clause (a) is material and relevant. Under it the requirement is that the assessee should have made" full and true disclosure of such particulars". Obviously, the statute makes a difference in the requirement with regard to default committed in respect of Clause (a) or (c) of Sub-section (1) of Section 271. In the former case the assessee should have made full disclosure of his income while in the latter he should have made full and true disclosure of the particulars of income. The Commissioner when he observed that the words "full and complete" occurring in Section 271(4A) do not cover a situation where additions are made to the returned income, was in error because, firstly, the words "full and complete" do not at all occur in the statute in relation to a default in filing the return within time. The only requirement is that the assessee has made full disclosure of his income. It appears that the Commissioner had in mind the latter portion of Clause (a) where the requirement is full and true disclosure, when he observed that the relevant words are full and complete; but, as seen, the term full and true disclosure has been used with reference to a default covered by Clause (c) which is not the case here. In the present case it has been found that the assessee had inflated his expenses to the tune of Rs. 2,000 on account of which an addition was made to his income. The question is whether this would be nondisclosure of income or furnishing inaccurate particulars of income. Since the Commissioner did not apply the correct test the impugned order dated 24th November 1973, cannot be sustained. The Commissioner should decide the case afresh after taking into consideration the correct tests required to be applied by the statute, In the result, the petition succeeds and is allowed. The impugned order dated November 24, 1973, and the order dated 29th November, 1973, are quashed. The matter is sent back to the Commissioner for decision of the application made by the assessee afresh and in accordance with law.
In the circumstances we make no order as to costs.