Section 273A discretion must be examined on merits before refusing waiver of interest and penalty.

Section 273A discretion under the Income-tax Act had to be considered on merits where the challenge concerned refusal to waive interest and penalty on a voluntary disclosure through a revised return. The Supreme Court held that the Commissioner's refusal could not be left unexamined on the relevant facts and circumstances, and the High Court should not have declined interference in extraordinary jurisdiction without such consideration. The High Court order was set aside and the matter remitted for fresh decision in accordance with law.

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Issues: Whether the Commissioner's refusal to exercise power under section 273A of the Income-tax Act, 1961 required examination on merits and whether the writ petition could be dismissed without such consideration.

Analysis: The challenge concerned the Commissioner's refusal to waive interest and penalty on a voluntary disclosure made by revised return. The matter involved a statutory discretion under section 273A, and the question was whether the facts and circumstances justified refusal of that power. The earlier disposal by the High Court had declined interference in extraordinary jurisdiction without entering into the merits.

Conclusion: The matter had to be examined on merits. The order of the High Court was set aside and the case was remitted for fresh decision in accordance with law.

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