9911796707
TMI Blog1996 (12) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... to him was not correct and that he was liable to file wealth-tax returns and to pay wealth-tax. Therefore, on February 27, 1991, he filed wealth-tax returns for the assessment years 1981-82 to 1987-88. He also deposited the tax due from him as per his return. After he filed the said returns, the Department realised that he was not filing the returns, and, therefore, the Department issued a notice under section 17 of the Wealth-tax Act, 1957, bearing the date of April 4, 1991, and the same was served on him on April 14, 1991. In pursuance of the said notice, the petitioner informed the Department that the returns already filed by him should be treated as compliance with the said notice. Thereafter, the returns filed by him were assessed by the Department and the Department found that the returns filed by him were correct and proper. The wealth-tax was assessed. Thereafter, he was called upon as to why he should not be required to pay interest as well as penalty. Though the petitioner prayed for not levying penalty against him by taking the matter up to the Income-tax Tribunal, he failed in his endeavour and the Department levied penalty as well as interest. The petitioner had paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 18." Now, if the above provisions of section 18B are taken into consideration, then it would be quite clear that a discretion lies with the Commissioner either to reduce or to waive the amount of penalty on three grounds: (1) If the assessee has disclosed his net wealth by making in good faith true disclosure before the serving of the notice under sub-section (2) of section 14. (2) If the assessee has not concealed any particulars of the assets or has not supplied any incorrect particulars while filing the returns and (3) that he has cooperated in the 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 the Act. Therefore, bearing the above aspects in mind, we proceed to consider the order in question as well as the submissions made before us. If the order of the learned Commissioner of Income-tax is read carefully, then it seems that the learned Commissioner of Income-tax was swayed by the fact that there was delay in disclosure of his wealth by the present petitioner. It also seems that he was also prejudiced in considerin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to be fulfilled by him for claiming either waiver or reduction in the penalty. It is an admitted fact that the Department had not found any fault with the returns filed by the present petitioner. Whatever wealth was disclosed by the petitioner in his return was found to be his wealth liable for the payment of wealth-tax. There is no case of the Department discovering any additional wealth of the petitioner besides the wealth disclosed by the petitioner in his returns. At the cost of repetition it must be said that the disclosure of his wealth is a voluntary one as he was not served either with the notice under section 14(2) or section 17 of the said Act of 1957. When the Department had not found any fault with the statements given by the petitioner in his returns and when the Department had not found or discovered any additional wealth besides the wealth mentioned by the petitioner in his returns and when the petitioner had voluntarily filed his returns, then it would be quite obvious that there is fulfilment of the second condition required by the said Act. It is not the claim of the Department that he was not co-operative when the assessment proceedings were going on. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n it was not open for the Department to levy penalty. Because once the Department accepts the explanation for the delay, then the Department would not have been justified in penalising him even after accepting his delay. Now apart from this, even assuming that while considering the question of waiver or reduction of penalty, the explanation for the delay in filing the returns is to be considered, we are of the opinion that the grounds given by the Department in rejecting the said explanation could not be accepted. It is the claim of the petitioner that he was advised that as his wealth was invested in industrial undertakings, he need not file the wealth-tax returns and consequently though he has filed income-tax returns for these years 1981-82 to 1987-88, he had not filed the wealth-tax returns. The explanation of the petitioner is rejected on the ground that the petitioner has not produced the opinion given by his tax consultant to that effect. In our opinion, a disclosure between an advocate and his client is a privilege disclosure. As it is a privilege disclosure, no authority can compel the party to prove the same. But if the circumstances on record are taken into consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest on account of the delay in filing the returns on the tax which was due from him and the petitioner has paid the said amount of interest and he is not disputing the said action of the Department. When the petitioner has paid all his dues along with the interest thereon as claimed by the Department, we are of the opinion that the circumstances of the case are such that there is no justification for levying penalty. The petitioner had voluntarily filed his returns for seven years. The returns filed by him were the honest disclosure of all his wealth. The petitioner had fully co-operated with the Department during the assessment proceedings. The petitioner has also paid the tax along with the interest without any hesitation and the explanation given by him for the delay in filing the returns could not be said to be unbelievable or unacceptable by any prudent man. Therefore, in the circumstances, we are of the opinion that it is not at all necessary to remand the matter to the Income-tax Commissioner to consider the question as to whether there should be waiver or only reduction in the penalty. Though this court might have taken the view in earlier proceedings to remand the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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