9911796707
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Issues:
Petition to quash CWT order under W.T. Act, 1957 - Application for waiver of penalty under s. 18(2A) - Disclosure of net wealth - Good faith - Dharmada account disclosure - Commissioner's rejection of application - Judicial review of Commissioner's decision. Analysis: The petitioner, an individual assessee, filed wealth-tax returns for multiple assessment years but did not submit returns for specific years due to belief that wealth was below taxable limit. The WTO added 10% appreciation in machinery value and included dharmada account amount in petitioner's wealth. Notice for penalty under s. 18(1)(a) was issued, leading to petitioner's application under s. 18(2A) for penalty waiver, claiming voluntary and good faith disclosure of wealth. Commissioner rejected the application, citing incomplete disclosure of wealth and dharmada account. The main contention was whether the petitioner's partial disclosure of machinery value and omission of dharmada account constituted a lack of full disclosure under s. 18(2A). The section allows penalty waiver if full disclosure is made voluntarily and in good faith. The WTO's valuation discrepancy with the petitioner does not necessarily indicate inadequate disclosure but could be an honest difference of opinion. The petitioner's omission of the dharmada account was contested, arguing it was not obligatory due to its charitable nature. However, since the account was included in the wealth-tax return by the WTO, the petitioner's argument was weakened. The Commissioner's failure to consider the petitioner's good faith and intention of honesty in the disclosure process was highlighted. Good faith, as per law, requires honest actions regardless of negligence. The Commissioner's omission to assess the petitioner's good faith was deemed crucial, as it forms a vital aspect of s. 18(2A) requirements. The discretionary power under s. 18(2A) mandates a lawful exercise of discretion, not a mechanical one. Therefore, the Commissioner's decision to reject the application was overturned, and the matter was remanded for a fresh decision in accordance with the law. In conclusion, the writ petition succeeded, quashing the CWT's order, and directing a reconsideration of the petitioner's application under s. 18(2A) with proper evaluation of good faith and full disclosure aspects.
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