JUDGMENT R.S. Garg, J. 1. By this petition under Article 227 of the Constitution of India, the petitioner challenges the legality, correctness and validity of the order dated March 19, 1985, passed by the Commissioner of Income-tax, Bhopal, in case NVD/HORS/IT/98 of 1978 for the assessment year 1971-72 on the ground that the learned Commissioner did not exercise his powers in accordance with law nor has considered the legal position for attraction of Section 273A(4) of the Act. 2. According to the petitioner, he had filed the return of loss and while passing the assessment order on November 29, 1971, the Assessing Officer, had directed issuance of penalty notice for concealment of the amount of Rs. 16,000. Immediately thereafter, the petitioner filed an application under Section 271(4A) of the Act on the ground that he had made full and complete disclosure voluntarily and in good faith but the said application happened to be rejected on February 14, 1975, by the Commissioner of Income-tax, Bhopal. In reply to the notice issued to the petitioner for imposition of the penalty, he submitted by his reply dated June 25, 1975, that there were no mala fides on his part and merely because default of concealment has been committed penalty is not required to be imposed unless the petitioner had acted with some ulterior motives. 3. After hearing the petitioner by order dated July 7, 1975, the Income-tax Officer rejected the plea of the petitioner and directed imposition of penalty of Rs. 13,000. The said order became final but after the coming into force of Section 273A(4) with effect from October 1, 1975, the petitioner again moved an application on January 14, 1980, stating therein that the levy of the penalty had caused genuine hardship to the assessee and the assessee had fully co-operated in the assessment. The learned Commissioner by his order dated March 19, 1985, rejected the application of the petitioner. 4. Shri Nema, learned counsel for the petitioner, submits that the order passed by the Commissioner of Income-tax is patently illegal because he has taken into consideration extraneous material which otherwise he could not. According to him, an application under Section 273A(4) of the Act could be filed on different grounds or grounds which were not available for filing an application under Section 271(4A). According to him, an application under Section 273A(4) of the Act could be filed on different grounds or grounds which were not available for filing an application under Section 271(4A). He further submits that the observation made by the Commissioner that the assessee was not co-operative in the recovery proceeding is also bad because of his return of loss, recovery proceedings were not required to be initiated. Regarding the observations that the petitioner would not suffer any genuine hardship, he submits that the learned Commissioner has merely employed the language of the provisions of law but has not given his finding nor has he considered that in the return of loss where the asses-see has already suffered loss, imposition of the penalty would in fact be a genuine hardship. On the other hand, Shri Tankha, learned counsel for the respondents, submits that the order passed under Section 271(4A) having become final the petitioner was not entitled to file an application under Section 273A(4) of the Income-tax Act and even if it was a return of loss and there were no recovery proceedings the petitioner was required to prove that he would in fact suffer a genuine hardship. He submits that the order passed by the Commissioner does not call for any interference. 5. According to Section 271(4A), a party could move an application before the Commissioner for waiver/reduction of the penalty on the grounds that he had disclosed the full material and had given full disclosure voluntarily and in good faith. Section 273A(4) came on the statute book with effect from October 1, 1975. The petitioner seeking protection under this provision filed another application and while deciding the application the Department never raised the objection that the provisions would not be applicable. By the Direct Tax Laws (Amendment) Act, 1989, Sub-section (6) of Section 273A has been amended with effect from April 1, 1989, according to which the provisions of Section 273A as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1989, shall apply to and in relation to any assessment for the assessment year, commencing on April 1, 1988, or any earlier assessment year, and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year. 6. 6. The consideration of the rejection of the petitioner's application filed under Section 273A(4) would certainly show that the Commissioner had taken into consideration irrelevant material because he was not required to consider, the facts regarding full and complete disclosure and good faith while considering the application under Section 273A(4). According to Sub-section (4) of Section 273A 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 if he is satisfied that to do otherwise would cause genuine hardship to the assessee, having regard to the circumstances of the case and the assessee has co-operated in any enquiry relating to the assessment or any proceeding for the recovery of any amount due from him. 7. It is not disputed before me that in the instant case when he return was a return of loss no recovery of the tax was required to be started against the petitioner. The observation made by the Commissioner that assessee was not co-operative in recovery proceedings would certainly be contrary to the record and would show non-application of mind. So far as the question of hardship is concerned except employing the language as provided under Section 273A(4), the Commissioner has not given any reasons. 8. Considering the totality of the circumstances, I am of the opinion that the order dated March 19, 1985, passed by the Commissioner of Income-tax, Bhopal, deserves to be quashed. It is accordingly quashed. The learned Commissioner is directed to reconsider the matter in accordance with law after giving an opportunity of hearing to the petitioner. There shall be no orders as to costs. Security amount, if any, deposited by the petitioner be refunded after due verification.