Law:

Section:

Section 18B of the wealth-tax act, 1957-Penalty-Commissioner's power to reduce or waive-assessee's application for waiver rejected by commissioner without passing speaking order and giving supporting reasons, facts and figures and without affording opportunity of personal hearing-Whether commissioner right in law-Held, on facts, no Facts For the assessment years 1968-69 to 1974-75, the assessee applied to the Commissioner under section 18B for waiving the penalty. The Commissioner rejected the same on the grounds (i) that the disclosure of net wealth by the assessee was neither voluntary nor full and true ; and (ii) that demand had not been paid. In writ proceedings against these orders, the assessee contended (i) that no opportunity of personal hearing was afforded before passing the impugned order ; (ii) that the impugned order was not a speaking order and no supporting reasons had been recorded ; and (iii)that there was an apparent mistake inasmuch as, although the demand had been paid for the assessment years 1972-73 to 1974-75, the Commissioner had observed that the same had not been paid. Held 1. There is no provision for personal hearing on application under section 18B. It would, therefore, naturally depend upon the facts and circumstances of each case whether a personal hearing should be granted or the assessee should be given a notice to explain certain points which may arise in the case and which may not have been clarified in the application itself. The order contemplated under section 18B is a quasi-judicial order and, therefore, it must be supported by reasons and the principle of audi atteram partem should be applied before passing the order. Although discretion has been vested in the Commissioner under section 18B as to the waiver of penalty, the discretion must be exercised judiciously and not arbitrarily. If the statutory conditions are satisfied, the Commissioner is under a statutory duty to exercise his discretion in assessee's favour. 2. The Commissioner was required to record a finding whether the assessee had voluntarily and in good faith made full and true disclosure of his net wealth. No facts or figures were given by the Commissioner…

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