2013 (9) TMI 148 - HC - Wealth-tax

Jurisdiction u/s 18B - Power to reduce or waive penalty - Whether the Commissioner of Wealth Tax had exercised jurisdiction in accordance with parameters set out in Section 18B of the Wealth Tax Act - Held that - A perusal of the order revealed that the learned Commissioner had passed a nonspeaking order - The order does not indicate the facts that do not signal towards full and true disclosure - No other reason had been assigned whether by reference to Section 18B of the 1957 Act to the facts pleaded by the petitioner. Section 18B empowered the Commissioner of Wealth Tax to entertain an application for reducing/waiver of penalty in accordance with factors detailed in Section 18B and required the Commissioner to pass a speaking order recording whether the facts pleaded fall within the factors enumerated in Section 18B - The matter was remitted to the Commissioner of Wealth Tax, Jalandhar to decide the petition under Section 18B of the 1957 Act afresh order set aside Decided in favour of Petitioner.

Summary

Issues:
1. Setting aside an order passed by the Commissioner of Wealth Tax under Section 18B of the Wealth Tax Act, 1957.

Analysis:

The High Court of PUNJAB & HARYANA considered a writ petition seeking to set aside an order dated 12.3.1991 passed by the Commissioner of Wealth Tax, Jalandhar, under Section 18B of the Wealth Tax Act, 1957. The petitioner was not present, but the court examined the impugned order, the paper book, and Section 18B of the Act. The respondent's counsel argued that the order was legal and valid, asserting that the Commissioner had correctly noted the lack of full and true disclosure by the petitioner. The central issue for adjudication was whether the Commissioner had exercised jurisdiction in line with the parameters outlined in Section 18B of the Act.

Section 18B of the Wealth Tax Act grants the Commissioner the authority to reduce or waive penalties under certain circumstances, provided the taxpayer has made full and true disclosure voluntarily and in good faith. The Court noted that the impugned order was a nonspeaking order, failing to specify the reasons for rejecting the application based on the lack of disclosure. As a result, the Court found the order to be deficient and set it aside, remitting the matter back to the Commissioner for a fresh decision within three months of the parties appearing before him on 10.9.2013.

In essence, the Court emphasized the importance of the Commissioner passing a speaking order in accordance with the factors detailed in Section 18B of the Act. By failing to provide specific reasons for rejecting the application, the Commissioner had effectively denied the petitioner the opportunity to have their case considered under the provisions of Section 18B. The Court's decision to remit the matter for fresh consideration underscored the need for transparency and adherence to statutory requirements in such proceedings, ensuring that taxpayers are afforded due process and a fair hearing in matters concerning penalties under the Wealth Tax Act, 1957.