TaxTMI 
TaxTMI 
2018 (3) TMI 230
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....aiver of penalty imposable under Section 271(1)(c) of the Act. 3. The facts of the case are that the petitioner is proprietor of M/s. Khandelwal Chemicals, engaged in the business of manufacture and sale of chemicals. He is also the partner in partnership firm of M/s. Khandelwal Chemicals. The petitioner filed his return of income tax for Assessment Year 2014-15 on 25.3.2015, declaring a total income of Rs. 4,15,030/- and shown income under the head salary and business and interest income. He has also shown long term capital gain of Rs. 13,58,846/- on transfer of liability equity shares, which was claimed as exemption u/s. 10(38) of the Act. On transfer of equity shares of M/s. Kappac Pharma Ltd., to the tune of Rs. 13,58,846/-. The petitioner claimed the said long term capital gain as exempt u/s. 10(38), which provides exemption to income arising from transfer of a long term capital asset being an eligible equity share in a company. 4. The case of the petitioner selected for scrutiny under CASS. The reason for scrutiny was suspicious Long Term Capital Gain on Share (Input from investigation wing). Consequently, a notice under Section 143(2) of the Act was issued on 18.9.2015....
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....ner of Income Tax - I, for waiver of penalty leaviable u/s 271(1)(c) of the Income Tax Act and in para 6 he has submitted that he has fulfilled following condition for waiving of leviable penalty :- "a. The assessee has prior to detection by the A.O. has voluntarily and in good faith made full disclosures of such particulars. b. The assessee has also cooperated in all the quires relating to the assessment of income. c. That the assessee has also paid the resultant tax and interest on the deduction withdrawn." 9. In the mean time the Assessing Officer also levied penalty of Rs. 3,53,000/- u/s 271(1)(c) of the Income Tax Act, 1961 vide his order dated 30.6.2017. The observation of the assessment officer is as under :- "....... it is clear assessee did not surrendered capital gain voluntarily. He withdrew deduction u/s 10(38) I.T. Act, 1961 after deduction of department. Therefore, the assessee is liable for penatly u/s 271(1)(c) of the I.T. Act, 1961. Penalty imposable is @ 100% to 300% of tax sought to be evaded. In the facts of the case, I am imposing minimum 100% penalty calculated as under, which is leviable as per provision of section 271(1....
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....Other Sources' vide his letter dated 16.8.2016 and these facts the assessing officer has mentioned in assessment order and penalty order u/s 27(1)(c) of the Act in para 4 and 6 of the order. 13. The condition for waiver of penalty in Section 273(A) (4) of the Act are as under :- "(i) To do otherwise would cause genuine hardship to the assessee, having regard to the circumstances to the case; and (ii) The assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him." 14. The Principal Commissioner after considering the case came to the conclusion that the case of the petitioner is not a genuine hardship as he did not submit any evidence / document to show that it was called genuine hardship financially or in any manner and rejected the petition filed by him for waiver of penalty u/s.273(A) of the Act. 15. Learned Senior counsel for the petitioner has drawn our attention to the conditions for waiver of penalty in section 273(A) (1) & 4 of the Act and also drawn our attention to CBDT Circular dated 21.9.2016 (Annexure P/10) and submitted that the Principal Commissioner should have taken ....
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....dings are satisfied, exercise of discretion cannot be either arbitrary or capricious and has to be judicious and objective. He has placed reliance on the decision of the Bombay High court in the case of Laxman V/s Commissioner of Income-tax, (1988) 174 ITR 465 (Bombay) and submitted that the full and true disclosure was made by the petitioner voluntarily and in good faith and once full and true disclosure of income was made voluntarily then he could file his application for waiver and erred in law in rejected the application for waiver of penalty. 20. The Division bench of Bombay High Court in the case of Laxman V/s. Commissiner of Income-tax (supra) had also on occasion to deal with the interpretation of section 273A of the Act, wherein the Division Bench observerd that the most important facet of Section 273A is furnishing of return in respect of income voluntarily and in good faith with full and true disclosure of particulars thereof. According to the Division Bench 'voluntary' means 'without compulsion'. Secondly, according to the Division Bench though 'good faith' is not defined under the Act, considering the definition given under section 2(22) of t....