Whether “genuine hardship” should be existing at time of assessment or levy of penalty or at time of making of application under section 273A(4)

1. Section 273A(4) of the Income-tax Act, 1961 provides that the Commissioner of Income-tax may, on an application by an assessee, and after recording his reasons for so doing, reduce or waive the amount of any penalty payable by the assessee under the Income-tax Act or stay or compound any proceedings for recovery of any such amount if he is satisfied that :—

     (i)   to do otherwise would cause genuine hardship to the assessee, having regard to the circumstances of 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.

2. Representations have been received with regard to the point of time at which the existence of “genuine hardship” would entitle the assessee to relief under the above sub-section i.e., whether the “genuine hardship” should be existing at the time of assessment or levy of penalty or at the time of making of appli­cation under section 273A(4).

3. In this regard, it is hereby clarified that the “genuine hardship” referred to in the provisions of section 273A(4) should exist at the time at which the application under section 273A(4) is made by the assessee before the Commissioner and should so exist even at the time of passing of order under section 273A(4) by the Commissioner.

Circular : No. 784, dated 22-11-1999

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