1984 (11) TMI 15

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....te returns for the assessment years 1963-64 and 1964-65. In the present petition, the challenge is to the order regarding the return filed on April 8, 1967, for the assessment year 1964-65. It is admitted by the petitioner that the return was filed late and as such penalty was leviable under section 271(1)(a) of the Act for the said assessment year. However, the case of the petitioner is that he had filed the return prior to the issue of notice to him under sub-section (2) of section 139 of the Act. The return filed was not only voluntary but was made in good faith inasmuch as he had made fall disclosure of his income. Thus, the Commissioner of Income-tax failed to exercise discretion vested in him in not reducing or waiving the penalty,....

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....could not be regarded as full disclosure of his income for the said year as contemplated by section 271(4A) of the Act. I may note here another fact. The petitioner had challenged the order of the Appellate Assistant Commissioner, referred to in the above quoted order of the Commissioner, before the Income-tax Appellate Tribunal. The Revenue had also filed an appeal against that very order. The two appeals were decided by a common order of December 22, 1970. While dismissing the appeal filed by the Income-tax Officer and allowing the appeal of the assessee (in part) it was observed : " The application of the proviso to section 145 is undoubtedly called for. However, we feel that the estimate of sales at Rs. 90,000 is somewhat excessiv....

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....ete ", in this context, means free from deficiency, entire or perfect. The finding of the Commissioner in the impugned order that the petitioner had not made full disclosure and, therefore, the discretion ought not to be exercised in his favour, is wrong, and is liable to be set aside. I may note here that Shri Prem Nath, Commissioner of Income-tax, has filed a counter-affidavit in opposition to the writ petition wherein he has averred to additional reasons than the one given in the order for rejecting the application of the petitioner. In reply to paragraph 10(ii) of the petitioner, it is, inter alia, urged : " I say that although I had received the application of the petitioner under section 271(4A) before the assessment was made an....