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of <h1>High Court quashes Commissioner's order on tax penalty, ruling in favor of petitioner</h1> The High Court quashed the order passed by the Commissioner of Income-tax under section 273A, directing a reconsideration of the petitioner's application. ... Penalty Issues:Challenge to the legality and validity of orders passed by the Commissioner of Income-tax under sections 264 and 273A of the Income-tax Act.Analysis:The petitioner, a dissolved partnership firm, challenged the orders passed by the Commissioner of Income-tax for the assessment year 1983-84. The petitioner filed a revised return showing additional income, leading to a penalty under section 271(1)(c). The petitioner did not appeal but filed a revision petition under section 264 and an application under section 273A. The Commissioner rejected both petitions, prompting the petitioner to approach the High Court under article 226 of the Constitution of India.The petitioner's counsel argued that the concealment of income was detected during a search in June 1982, but the assessment proceedings were for the year 1983-84. The Commissioner failed to consider the correct legal position and wrongly applied provisions that did not exist at the material time. The counsel contended that the revised return was filed before assessment proceedings, indicating a bona fide mistake and justifying the challenge to the penalty under section 271(1)(c).On the other hand, the Department's counsel argued that the orders under sections 264 and 273A were not appealable, and the Commissioner's decision was based on valid reasons. However, the High Court found that the Commissioner did not properly exercise jurisdiction under section 273A. The High Court highlighted that the Commissioner failed to consider relevant facts and legal provisions, leading to the quashing of the order under section 273A and directing the Commissioner to reconsider the petitioner's application under that section.The High Court concluded that the impugned order under section 273A was quashed, and the Commissioner was directed to review the application afresh. The Court made the rule absolute in favor of the petitioner, excluding the order under section 264, and made no order as to costs.
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