Waiver of interest under section 273A(1)(c) must be assessed only on statutory criteria, not extraneous grounds.

The Commissioner's discretion under section 273A(1)(c) is confined to the statutory criteria of voluntary disclosure before notice, good faith, and cooperation in the proceedings. Where those conditions are satisfied, the authority may determine the extent of relief but cannot refuse waiver of interest on grounds outside the provision. The refusal in this matter was based on reasons not permitted by section 273A(1)(c), so the rejection was unsustainable and the application required reconsideration in accordance with that provision.

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Issues: Whether the Commissioner could reject the application for waiver of interest under section 139(8) of the Income-tax Act, 1961, when the conditions in section 273A(1)(c) were found to be satisfied.

Analysis: The statutory scheme under section 273A(1)(c) requires the Commissioner to consider whether the assessee made a voluntary disclosure prior to any notice and acted in good faith, with cooperation in the proceedings. Once those conditions are satisfied, the authority retains discretion as to the extent of relief, but that discretion does not extend to a total rejection of the waiver application on grounds outside the statutory criteria. The reasons recorded for refusal of waiver of interest did not fall within the permissible considerations under section 273A(1)(c).

Conclusion: The rejection of the waiver application was unsustainable and the matter had to be reconsidered in accordance with section 273A(1)(c).

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