9911796707
TMI Blog1978 (2) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... date. The Act provides penalty for failure, without reasonable cause, to furnish the return within the time allowed and the minimum and maximum limits of penalty have been laid down. The Act, however, empowers the Commissioner of Wealth-tax to reduce or waive, in his discretion, the amount of minimum penalty imposable on his being satisfied about the existence of certain conditions. The petitioner admittedly failed to furnish the returns within the time allowed and he was, therefore, liable to be visited with penalty for late filing of returns in respect of all the three assessment years unless reasonable cause was shown. Under the circumstances, on July 20, 1974, the petitioner made an application to the Commissioner praying that the minimum penalty imposable upon him in respect of all the three assessment years should be waived in the circumstances of the case. On January 20, 1975, the petitioner presented a supplementary statement in which he claimed that he was entitled to the relief that he had sought inasmuch as all the conditions for the grant of relief were present in the case. The Commissioner by his order dated February 18, 1975, waived the minimum penalty imposable on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut reasonable cause failed to furnish it within the time allowed and in the manner required by sub-section (1) of section 14 or by such notice, as the case may be; or ...... he or it may, by order in writing, direct that such person shall pay by way of penalty- (i) in the cases referred to in clause (a), in addition to the amount of wealth-tax, if any, payable by him, a sum equal to two per cent. of the tax for every month during which the default continued, but not exceeding in the aggregate fifty per cent. of the tax ; ....... (2A) Notwithstanding anything contained in clause (i) or clause (iii) of sub-section (1), the Commissioner may, in his discretion,- (i) reduce or waive the amount of minimum penalty imposable on a person under clause (i) of sub-section (1) for failure, without reasonable cause, to furnish the return of net wealth which such person was required to furnish under sub-section (1) of section 14, or ...... if he is satisfied that such person- (a) in the case referred to in clause (i) of this sub-section has, prior to the issue of notice to him under sub-section (2) of section 14, voluntarily and in good faith, made full disclosure of his net wea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made full disclosure of his net wealth and has co-operated in any enquiry relating to the assessment of the wealth represented by such assets and has either paid or made satisfactory arrangements for payment of any tax or interest payable in consequence of an order passed under the Act in respect of the relevant assessment year. Now, in the present case, it is not in dispute that no notice under section 14(2) was served upon the petitioner. It is also not in dispute that the petitioner failed to furnish a return to the Wealth-tax Officer in respect of of the three assessment years in question within the time limited by law. Penalty was, therefore, imposable upon him under the relevant provisions of law unless reasonable cause was shown. Under these circumstances, the petitioner approached the Commissioner under section 18(2A) requesting that he should, in his discretion, waive the amount of minimum penalty imposable upon him. The Commissioner acceded to the request of the petitioner in so far as it related to the assessment year 1971-72. He, however, rejected the request of the petitioner in so far as it related to assessment years 1969-70 and 1970-71. The grounds on which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment of any tax or interest payable in consequence of an order passed under the Act in respect of the relevant assessment year. Once these three conditions are satisfied, there is no option, as earlier pointed out, to refuse to exercise discretion. The Commissioner in the instant case has refused to exercise discretion because he believed that one of the conditions for the exercise of discretion was not satisfied. The condition which, according to the Commissioner, was not satisfied was that the assessee had not voluntarily filed returns for the two assessment years in question since he did so only after he was asked, during the course of the assessment proceedings for the assessment year 1971-72, to do so. In our opinion, the Commissioner completely misdirected himself in law in reading into section 18(2A) such a condition. Section 18(2A)(a) does use the word "voluntarily". The said word, however, has to be read with the expression "made full disclosure of his net wealth". In other words, the condition which the legislature has imposed is that in cases where an assessee has, prior to the issue of notice to him under sub-section (2) of section 14, filed a return but has not do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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