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Issues: Challenge to rejection of application for waiver or reduction of penalties under Wealth-tax Act, 1957 for multiple assessment years. Jurisdiction of Commissioner under section 18B of the Act. Voluntariness of filing returns and cooperation in assessment proceedings.
Analysis: The petitioner challenged the order rejecting the application for waiver or reduction of penalties under section 18(1)(a) of the Wealth-tax Act, 1957, for assessment years 1975-76, 1976-77, 1977-78, and 1978-79. The petitioner sought direction for dealing with the application under section 18B of the Act. The returns of wealth were filed after the due date, attracting penalties under section 18(1)(a) of the Act. Assessments were made for the years in question, and penalties were proposed by the Assessing Officer. The petitioner applied for waiver citing cooperation in assessment proceedings and payment of taxes. The Commissioner rejected the application stating the returns were not voluntary due to prior issuance of notices under section 17 of the Act. The petitioner contended fulfillment of conditions under section 18B and challenged the rejection. The power under section 18B allows the Commissioner to waive or reduce penalties if the taxpayer voluntarily and in good faith disclosed net wealth before notice under section 14, cooperated in inquiries, and paid taxes due. The rejection was based on the non-voluntariness of returns due to prior notices under section 17. The court noted penalties for the assessment years and found no cause for interference except for 1975-76 where no notice under section 17 was issued. For 1975-76, the petitioner met the pre-conditions for the Commissioner's jurisdiction under section 18B. The court held the rejection for 1975-76 on the ground of non-fulfillment of pre-conditions was unsustainable. The court directed the Commissioner to review the application for that year within two months. In conclusion, the court partially allowed the writ petition, setting aside the order for 1975-76 and directing the Commissioner to review the application in accordance with the law. The decision emphasized the importance of fulfilling pre-conditions for the exercise of jurisdiction under section 18B and upheld the petitioner's claim for the assessment year 1975-76.
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