9911796707
TMI Blog1983 (9) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... he above years were due on 30-6-1972, 30-6-1973 and 30-6-1974. The assessee, however, filed the returns on 22-2-1978 for all the above years. Show-cause notices were issued by the WTO as to why penalty should not be levied for the default of the assessee. In absence of any response from the assessee the WTO levied penalties of Rs. 480, Rs. 5,510 and Rs. 7,480 respectively. Being aggrieved, the assessee carried the matters in appeal before the AAC. During the pendency of appeals before the AAC, the assessee approached the Commissioner under section 18B(1) of the Wealth-tax Act, 1957 ('the Act') with a prayer to waive or reduce the penalties levied by the WTO. In order under section 18B(1) dated 4-2-1983 the Commissioner had reduced the quant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustrial undertaking entitled to exemption under section 5(1)(xxxii) of the Act and if this exemption is granted, the net wealth of the assessee would be below taxable limit. Therefore, penalty should not be levied in this case. On the other hand, the submission of the learned departmental representative Shri Vaidya was that the moment the assessee approached the Commissioner his right to appeal under section 18B(5) ceases. His next submission was that the assessee's approaching the Commissioner will mean that the assessee has accepted the guilt and the element of mens rea is clearly established. Therefore, in view of the facts that the assessee had no right of appeal and mens rea was very much there the penalties were rightly sustained by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evying the penalty by the WTO the assessee has filed appeal before the AAC well as approached the Commissioner under section 18B. The moment the assessee approached the Commissioner under section 18B for waiver or reduction of penalty that means the assessee has admitted his guilt and he is liable for penalty. The scheme of this provision is that in case of hardship the Commissioner is empowered to reduce or waive the penalty in spite of the fact that the assessee is liable for penalty. A similar issue though not under the same section but under section 273A of the Income-tax Act, 1961 was considered by the Gujarat High Court in the case of Smt. Kherunissa Allibhai v. CIT [1978] 113 ITR 443. The relevant observation reads as under: "... Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or deduction under section 5. The story of the assessee is not believable for the reason that if he was so advised by some income-tax practitioner he could have claimed the deduction in the firm's case in which he was a partner. No such deduction was claimed by the firm in which he was a partner. If he was so advised the deduction could have been claimed in the firm's case. There was neither any appeal nor rectification application relevant to the so-called deduction claimed by the assessee. Nor the assessee has taken this plea before, the WTO. If the assessee was so honest he could have put the same explanation before the WTO. Therefore, considering the assessee's conduct in approaching the Commissioner accepting his guilt under section 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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