M. B. SHAH, J. ( 1 ) FOR the Assessment Year 1968-69 the petitioner submitted the return of income of Rs. 3,83,300/- on 17th september 1968. Before the assessment proceedings started, the petitioner made an application dated 29th March 1971 for settlement to the Commissioner of income-tax, Gujarat II, Ahmedabad, disclosing voluntarily an amount of Rs. 3,00,000/- being profit on sale of import licence and on the next day, i. e. on 30th march 1971 filed a revised return including the above voluntarily disclosed income. The Income-tax Officer did not accept that the import licence was sold for Rs. 3,00,000/- and he estimated the profit on sale of yarn and made additions for profit and investment said to have been made in disposal of import licence. He estimated the income at Rs. 11,14,179/ -. On appeal the Appellate assistant Commissioner reduced the said amount to Rs. 7,21,438. The order passed by the Appellate Assistant Commissioner was confirmed by the Tribunal. ( 2 ) THEREAFTER, the Inspecting Assistant commissioner of Income-tax, Central range, Ahmedabad, passed an order dated 3rd August 1976 under S. 271 (1) (c) imposing penalty of Rs. 11,02,000/ -. The tribunal reduced the penalty to Rs. 7,92,220/ -. The petitioner paid the amount of penalty and interest over it on 1st September 1977. ( 3 ) THEREAFTER the petitioner filed an application dated 28th September 1977 under Section 273 (4) of the Act for waiver of the above panalty. In the said application it was inter alia pointed out by the petitioner that the petitioner and its partners had already suffered the financial liability of Rs. 18,90,100/- in respect of the transaction. It was prayed that the Commissioner may exercise the power under Section 273a (4) and to waive the penalty as otherwise it would cause genuine hardship to the petitioner and it was also pointed out that the petitioner had co-operated in all inquiry relating to the assessment and in the proceeding for the recovery of any amount due from it. The petitioner also pointed out the financial hardship which would be caused to it by imposition of the said penalty. ( 4 ) THAT application was rejected by the order dated 18th December 1979 (Annexure "k") passed by the respondent under Section 273a (4) on the ground that the petitioner had already paid the penalty and, therefore, Section 273a (4) was not available to him. ( 4 ) THAT application was rejected by the order dated 18th December 1979 (Annexure "k") passed by the respondent under Section 273a (4) on the ground that the petitioner had already paid the penalty and, therefore, Section 273a (4) was not available to him. The commissioner arrived at the conclusion that the words used in sub-Section (4) are "any penalty payable" which would indicate that when the amount of penalty is outstanding, then the power of waiver of penalty can be exercised. ( 5 ) THAT order (Annexure "k") is challenged by filing this petition. ( 6 ) IN our view, the ground for rejection of the petitioners application that it has already paid the amount of penalty and, therefore, there is no genuine hardship caused to the assessee cannot be said to be a valid reason for rejection of an application under Section 273a (4 ). By considering the scheme of Section 273a and particularly sub-Section (4) it is apparent that if the penalty which is imposed is paid, it would definitely indicate that the assessee has co-operated in the proceeding for recovery of any amount due from him and it would be a factor which is required to be taken into consideration in his favour. This would be clear by referring to sub-Section (4) of section 273a which empowers the commissioner to reduce or waive the amount of penalty payable by the assessee. Sub-Section (4) reads as under:"273a (4) Without prejudice to the powers conferred on him by any other provision of this Act, the Commissioner may, on an application made in this behalf by an assessee, and after recording his reasons for so doing, reduce or waive the amount of any penalty payable by the assessee under this Act or stay or compound any proceeding for the 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 enquiry relating to the assessment or any, proceeding for the recovery of any amount due from him. "reading this sub-section it is clear that for grant of relief, the Commissioner is required to consider whether (i) in the facts of the case there would be genuine hardship to the assessee if relief is not granted, 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. That would mean that clause (i) of sub- section (4) requires consideration of hardship and clause (ii) requires that the commissioner should verify that the assessee has co-operated (a) in any inquiry relating to the assessment or (b) in any proceeding for the recovery of any amount due from him. The second part of clause (ii) would certainly indicate that if he has co-operated in recovery of the amount of penalty payable by him, then it cannot be said that the Commissioner would have no jurisdiction to entertain the assessees application. In our view, the conditions precedent for exercise of quasi-judicial power under Section 273a (4) are the two-objective criteria mentioned in clauses (i) and (ii) and not whether the assessee has or has not paid penalty. As observed by the Division bench of this Court in the case of kherunissa Allibhai v. C. I. T. , (1978) 113 i. T. R. 443, the whole concept under section 273a is that the assessee concerned admits his liability to penalty but relies upon certain mitigating circumstances or certain circumstances specified in the section for the purpose of getting the penalty waived or reduced; when the assessee approaches the commissioner under Section 273a does not dispute his liability to pay the penalty; all that he says is that he should be given the relief of reduction or waiver by the fact that the conditions specified in section 273a are satisfied. So what is meant in the context of the scheme of section 273a is whether mitigating circumstances for waiver or reduction of the penalty are sasisfied or not. If such conditions are satisfied even if penalty is paid by the assessee because of compulsion, it would not mean that he is not entitled to get relief. ( 7 ) FURTHER, considering the scheme of section 273a, the phrase, "reduce or waive the amount of any penalty payable by the assessee under this Act" would cover cases where penalty is payable or paid by the assessee. ( 7 ) FURTHER, considering the scheme of section 273a, the phrase, "reduce or waive the amount of any penalty payable by the assessee under this Act" would cover cases where penalty is payable or paid by the assessee. While considering the word "payable" used in Section 7 (1) of the Public Premises (Eviction of unauthorised Occupants) Act, 1958 the supreme Court in the case of New Delhi municipal Committee v. Kalu Ram, (1976) 3 Supreme Court Cases 407, has observed that the word payable is somewhat indefinite in import and its meaning must be gathered from the context in which it occurs; payable generally means that which should be paid. In the context of Section 273a the word payable would mean that assessee is liable to pay a particular sum as penalty even if the liability to pay penalty is discharged, it would not mean that he is not entitled to get relief under Section 273a otherwise no assessee would pay the penalty till the proceedings under section 273a are over. ( 8 ) IN our view, as the Commissioner has rejected the application of the petitioner on a totally irrelevant ground, the order passed by him requires to be quashed and set aside. ( 9 ) IN the result, the petition is allowed. The impugned order dated 18th december 1979 (Annexure "k") passed by the respondent is quashed and set aside. The Commissioner of Income-tax, gujarat (Central), Ahmedabad, is directed to decide the application filed by the petitioner afresh on merits in accordance with law. Rule made absolute to the aforesaid extent with no order as to costs. Petition allowed. .