1981 (9) TMI 100 - HC - Wealth-tax

Summary

Issues involved:
The issues involved in this case are related to the submission of net wealth returns, imposition of penalties under section 18(1)(a) of the Wealth Tax Act, and the interpretation of section 18B regarding the waiver of penalties for late filing of returns.

Submission of Net Wealth Returns:
The petitioner submitted net wealth returns for assessment years 1970-71 and 1971-72 as an HUF without receiving any notice from the WTO. Subsequently, returns were filed for assessment years 1972-73 to 1975-76 showing a partition of agricultural land based on a court decree. The WTO accepted the disclosed land area but assessed the value higher and imposed penalties for late filing.

Penalties Imposed:
The WTO initiated penal action under section 18(1)(a) for late filing of net wealth returns and imposed penalties. The petitioner sought waiver of penalties under section 18B, with the CWT waiving penalties for some assessment years but not for others, citing lack of voluntary wealth declaration and non-satisfaction of section 18B conditions.

Interpretation of Section 18B:
The main issue for determination was whether section 18B(1)(i)(a) was applicable for assessment years 1972-73 to 1975-76. The court analyzed the provision of section 18B and previous court decisions to interpret the conditions for reducing or waiving penalties, emphasizing the requirement of voluntary and good faith disclosure of net wealth before the issuance of notice under section 14(2).

Court Decision:
The court held that the Wealth-tax Commissioner incorrectly interpreted section 18B by considering the filing of returns at the instance of the WTO as non-voluntary. The court quashed the order refusing to waive penalties for assessment years 1972-73 to 1975-76 and directed the Commissioner to reconsider the applications in light of the correct interpretation of section 18B.