C172 Flight Instructor reported inability to transmit to ATC prior to takeoff and detected smoke emanating near the light switches. Instructor shut down aircraft and exited along with passengers.

Narrative

While holding short of [Runway] XXL; I requested takeoff clearance; only to be instructed to standby due to three planes in the pattern landing. During this wait; my passenger (sitting in the left seat) reported intermittent headset reception. I addressed the issue by unplugging and re-plugging his headset connectors; restoring normal operation.Upon receiving clearance; I attempted to acknowledge it; but the Tower couldn't hear me; discovering my transmission ability was inoperative. Consequently; our takeoff clearance was canceled due to our inability to confirm it.Remaining in position; I attempted to resolve the radio issue by repeating the headset connector trouble-shooting procedure for both my passenger and myself; eventually regaining normal headset operation for the both of us. We requested another take-off clearance; and were told to standby. Shortly after; I detected and smelled white smoke near the light switches.I promptly notified the Tower of smoke in the cockpit and immediately began shutting off the electricals and the aircraft engine.After I turned off all electrical systems and shut down the plane; I directed my passenger to exit and move to the tail section of the aircraft.Fortunately; no flames erupted. Airport operations and the crash cart were alerted; and we were assisted back to the run-up area by ops.