Waiver of interest and penalty under section 273A must be examined on merits, not rejected as an impermissible review.

Section 273A was treated as conferring a substantive power on the Commissioner to reduce or waive interest and penalty in appropriate cases, so an application under that provision was not a barred review but a request for reconsideration on merits. The authority had to examine the assessee's bona fides and whether relief was justified in the interests of justice, and could not refuse consideration merely by characterising the exercise as impermissible review. The rejection order was therefore unsustainable and was set aside, with directions to reconsider the waiver request on merits within the time directed.

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Issues: Whether an application under section 273A of the Income-tax Act, 1961 for waiver of interest and penalty could be rejected on the ground that reconsideration would amount to an impermissible review, and whether the authority was bound to examine the request on merits.

Analysis: The provision was treated as conferring a substantive power on the Commissioner to reduce or waive penalty and interest in appropriate cases. An application under that section was held not to be a review simpliciter, but a reconsideration of the matter on its merits, including an assessment of the assessee's bona fides and whether relief was justified in the interests of justice. On that approach, the authority could not decline to consider the request merely on the premise that review was barred.

Conclusion: The rejection order was unsustainable and was set aside. The Commissioner was required to reconsider the request for waiver of interest and penalty on merits within the time directed.

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