Section 469 — Power to reduce or waive penalty, etc., in certain cases. Successor to s.273A of the 1961 Act.
Section 469 is in Chapter XXI — Penalties, which runs from section 439 to section 472.
Sub-section (1) lets the Principal Commissioner or Commissioner, on his own motion or otherwise and notwithstanding anything in the Act, reduce or waive a penalty imposed or imposable under section 439 where satisfied that the person made a full and true disclosure of the particulars voluntarily and in good faith before the Assessing Officer detected the concealment or inaccuracy, and has cooperated in any enquiry and paid or made satisfactory arrangements to pay the tax or interest payable. Sub-section (2) deems disclosure full and true where the difference between assessed and returned income does not attract penalties under section 439. Sub-section (3) requires prior approval of the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General where the income in respect of which penalty is imposed or imposable, aggregated across years where the disclosure spans more than one, exceeds Rs. 5,00,000. Sub-section (4) bars any further relief under the section for any other tax year once an order has been made in a person's favour. Sub-section (5) is a separate power, exercisable on the assessee's application and for recorded reasons, to reduce or waive penalties or to stay or compound recovery proceedings where refusal would cause genuine hardship and the assessee has cooperated. Sub-section (6) requires the same prior approval where the aggregate reduced, waived or compounded under sub-section (5) exceeds Rs. 1,00,000. Sub-section (7) sets twelve months from the end of the month of receipt for an order on such an application, sub-section (8) requires a hearing before rejection, and sub-section (9) makes every order under the section final and not open to question by any court or authority.
It gives the Commissioner a discretion to relieve a penalty where the taxpayer came forward before detection, or where insisting on the penalty would cause genuine hardship, with monetary thresholds requiring higher approval so the discretion is supervised. The one-time bar in sub-section (4) keeps the voluntary disclosure route from being used repeatedly.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Income above which prior approval is needed for waiver or reduction under sub-section (1) | Rs. 5,00,000 | The amount of income in respect of which the penalty is imposed or imposable for the relevant tax year, or the aggregate for all years where the disclosure relates to more than one | Sub-section (3) |
| Penalty amount above which prior approval is needed for relief under sub-section (5) | Rs. 1,00,000 | The aggregate amount of penalties reduced, waived or compounded under sub-section (5), whether relating to one or more tax years | Sub-section (6) |
| Time to dispose of an application under sub-section (5) | 12 months | From the end of the month in which the application was received by the Principal Commissioner or Commissioner; applies to an order accepting or rejecting it | Sub-section (7) |
There are two distinct routes here and they are not interchangeable. Sub-section (1) is about pre-detection voluntary disclosure of concealment and can be exercised by the Commissioner on his own motion; sub-section (5) is a hardship route that requires an application from the assessee and reasons recorded. Timing is decisive for the first: the disclosure must precede the Assessing Officer detecting the concealment or inaccuracy, and paying the tax and interest, or arranging to, is a separate condition on top. Relief under sub-section (1) is once only — sub-section (4) shuts the door on any other tax year after an order is made — and the twelve-month disposal period in sub-section (7) applies only to sub-section (5) applications. Every order under the section is final and cannot be questioned in any court or before any other authority.
An individual comes forward before the Assessing Officer has detected anything, makes a full and true disclosure in good faith of income of Rs. 6 lakh spread over two years, cooperates in the enquiry and arranges to pay the tax. The Principal Commissioner may waive or reduce the section 439 penalty under sub-section (1), but because the aggregate income for those years exceeds Rs. 5,00,000 he must first obtain the prior approval of the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General under sub-section (3). If the order goes in the individual’s favour, sub-section (4) shuts him out of relief under this section for any other tax year thereafter. The separate hardship route in sub-section (5) needs the same prior approval once the penalties reduced, waived or compounded exceed Rs. 1,00,000 — a lower figure, because it is measured on the penalty and not on the income.
In an application to the Principal Commissioner or Commissioner under sub-section (5), which must be disposed of within twelve months from the end of the month it was received and cannot be rejected without an opportunity of being heard; the sub-section (1) route needs no application, since the Commissioner may act on his own motion. Do not plan an appeal from the outcome — sub-section (9) makes every order under this section final and not open to question by any court or any other authority.
the Principal Commissioner or Commissioner may, whether on his own motion or otherwise, at his discretion reduce or waive the penalty imposed or imposable under section 439
See the full 1961 to 2025 concordance.
See the circulars index.