763/CBDT. - Income Tax - 763/CBDT

Instruction No: 763/CBDT Date of Issue: 23/9/1974 Section(s) Referred: 18(2A) Statute: Wealth Tax Act, 1957 Section 18(2A) of Wealth-tax, Act confers upon Commissioners of Wealth-tax, powers to reduce or waive penalties imposable u/s 18(1)(i) and 18(1)(iii) of Wealth-tax Act, provided certain conditions are satisfied. 2. In the case of Smt. Vidya Bai Vs. Commissioner of Wealth-tax, Mysore, the High Court of Karnataka quashed the order of Commissioner of Wealth-tax Mysore, u/s 18(2A) of Wealth-tax Act, on the ground that the impugned order was not a speaking order. In para 3 of the order, the High Court observed: "It is no doubt true that the power conferred on the Commissioner of Wealth-tax is discretionary in character. But since any order that is passed by him is likely to affect the interests of the assessee, the discretion vested with the Commissioner should be exercised with due care and caution. The only way in which an assessee can realise that the Commissioner has exercised his power u/s 18(2A) of the Wealth-tax Act with due care and caution is by looking into the reasons given in support of the order. Unless the order is as speaking order, it would not be possible to find out whether the power conferred on the Commissioner has been exercised in accordance with law or not. The above contention of the Petitioner is fully covered by the decision of this Court in S.SANNAIAH Vs. Commissioner of Income-tax (1973 (1) Mysore Law Journal 418), which is a decision given in the context of section 271(4A) of the Income-tax Act, which confers similar powers on the Commissioners of Income-tax." 3. The Board have accepted this decision as well as the decision in the case of S. Sanniah Vs. Commissioner of Income-tax referred to above and they desire that the observations made by the High Court quoted above may please be followed while passing orders u/s 18(2A) of the Wealth-tax Act, 1957.