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TMI Blog2002 (12) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... ealth-tax Officer for different years are as under : -------------------------------------------------------------------------------------------- Assess- Due date Date of fil- Delay in Wealth Wealth Tax Penalty ment of filing ing the months returned assessed demand under section year the return return (Rs.) 18(1)(a) -------------------------------------------------------------------------------------------- &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns voluntarily in good faith and made full and true disclosure of the assets. Respondent No. 1 rejected the said application vide order annexure P6 and held that failure of the Wealth-tax Officer to initiate proceedings under section 18(1)(c) of the Act cannot lead to the presumption that the assessee had made full and true disclosure of his net wealth within the meaning of section 18(1)(a) of the Act. The reasons recorded by respondent No. 1 for rejecting the application of the petitioner read as under : "In the facts and circumstances of the instant case, as discussed here in before, there is no doubt whatever that the assessee failed to make, in good faith, full and true disclosure of his net wealth for various years involved. The particulars and nature of Ranjit Nagar property was not disclosed in the returns for the assessment years 1967-68 to 1969-70. In the computation of statement of wealth enclosed with the respective returns, it is merely stated agricultural land (not an asset) nil'. It is not as if the particulars and nature of the land had been disclosed then exemption was claimed on the plea of the land being agricultural land. In any case the exclusion of Ranjit Naga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent No. 1 has erred in rejecting his application for waiver ignoring the fact that the Wealth-tax Officer had not initiated proceedings under section 18(1)(c) of the Act. In the written statement filed on behalf of the respondent No. 1, it has been admitted that the petitioner had filed returns voluntarily without any notice from the Department. At the same time, it has been averred that he had done so after receipt of complaints by the Department and initiation of enquiries to know his tax liability. It has been further averred that the findings recorded by the Wealth-tax Officer that the petitioner had not given full and complete particulars of his properties situated in Ranjit Nagar were upheld by the Income-tax Appellate Tribunal and, therefore, he is not entitled to claim waiver under section 18B of the Act. Shri Sanjay Bansal assailed the order annexure P6 by arguing that respondent No. 1 committed a serious illegality by declining the petitioner's prayer for waiver of penalty notwithstanding the fact that Wealth-tax Officer had not taken action under section 18(1)(c) of the Act. He referred to the Explanation appearing below section 18B(1) of the Act and argued that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inquiry relating to the assessment of his net wealth and has either paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year. Explanation. -For the purposes of this sub-section, a person shall be deemed to have made full and true disclosure of the particulars of his assets or debts in any case where the excess of net wealth assessed over the net wealth returned is of such a nature as not to attract the provisions of clause (c) of sub-section (1) of section 18." In Smt. Parkash Devi v. CWT [1983] 141 ITR 122, a Division Bench of this court interpreted section 18B of the Act and observed as under : "It is plain therefrom that in the instant case we are concerned with sub-clause (i) pertaining to the discretion of the Commissioner and sub-clause (a) pertaining to the Commissioner's satisfaction, as warranted by the facts of the present case. The Commissioner has, in so many words, in the impugned order stated that he was satisfied that the conditions set forth in section 18B are satisfied in this case. To enumerate them, these are : (1) that the returns, were fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any of the years. The mere fact that the returns are filed late would not invite the levy of penalty. The provisions contained in section 18B of the Act do make an assessee entitled to claim waiver once the assessee is able to show that he fulfilled all the conditions specified therein. Since the petitioners are found to have satisfied all the conditions and the Commissioner has recorded his satisfaction in his order dated February 9, 1983, passed under section 18B of the Act, there is no reason to refuse the benefit of waiver of penalty to the petitioners." Section 273A of the 1961 Act which is pari materia to section 18B of the Act was interpreted by a Division Bench of the Andhra Pradesh High Court in Seetha Mahalakshmi Rice and Groundnut Oil Mill Contractors Co. v. CIT [1981] 127 ITR 579 and it was held as under : "The Commissioner has a statutory duty and obligation to examine the facts and circumstances of each case and exercise his discretion fairly and objectively and arrive at a correct conclusion. This objective examination and satisfaction are necessary because it is a statutory discretion. A careful reading of the requirements or ingredients of this provision shows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the particulars of its income or for furnishing inaccurate particulars of such income for the assessment year in question. In this view and in view of the Explanation to section 273A(1), the assessee shall be deemed to have made full and true disclosure of his income." In Tarloki Nath Avinash Chander (HUF) v. CIT [1993] 203 ITR 266, a learned single judge of this court considered the case involving prayer for waiver of interest and penalty under section 273A of the 1961 Act and held as under : "Under section 273A all that the Commissioner had to see was whether the returns submitted by the petitioner without notice could be treated as voluntary and whether such disclosure made was in good faith. Both these aspects had escaped the notice of the Commissioner. The Commissioner had taken into consideration irrelevant matters like the petitioner being an assessee for a number of years and yet filing returns after a long delay and the petitioner being a habitual defaulter. The mere fact that the petitioner was an assessee to income-tax and advance tax had been paid by him or that the Income-tax Officer knew that the petitioner had earned taxable income would not be sufficient to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he propositions laid down in the aforementioned cases, it is to be seen whether the reasons assigned by respondent No. 1 for rejecting the application of the petitioner are legally correct. A perusal of the portions of the order passed by respondent No. 1 which have been extracted hereinabove shows that he denied the benefit of the fiction contained in the Explanation appearing below section 18B(1) by presuming that even though the penalty proceedings had not been initiated by the Wealth-tax Officer under section 18(1)(c), the petitioner was required to prove that the returns filed by him contained full and true disclosure of his net wealth. This is clearly against the plain language of the Explanation which provides that the assessee shall be deemed to have made full and true disclosure of the particulars of his assets where the excess of the net wealth assessed does not attract section 18(1)(c). It is not in dispute that the Wealth-tax Officer did not initiate proceedings against the petitioner under section 18(1)(c). Therefore, respondent No. 1 was bound to decide the application of the petitioner by presuming that the petitioner had made full and true disclosure of the particul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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