Law:

Section:

Section 18B of the Wealth-tax Act, 1957 - Penalty - Power to reduce or waive - Assessment years 1967-68 to 1974-75 - Penalty under section 18(1)(a) was imposed for late filing of returns but no penalty under section 18(1)(c) was levied - Assessee's petition for waiver of penalty under section 18(1)(a) was rejected by Commissioner (Respondent No. 1) - He held that even though penalty proceedings had not been initiated under section 18(1)(c), petitioner was required to prove that returns filed by him contained full and true disclosure of his net wealth - Whether, Commissioner was justified - Held, no FACTS The assessee filed returns of net wealth under section 14(2) for the assessment years 1967-68 to 1974-75 after due dates. The WTO made assessment and also levied penalty under section 18(1)(a). During the pendency of the penalty proceedings, the petitioner had filed an application under section 18B for waiver of penalty by asserting that he had filed returns voluntarily in good faith and made full and true disclosure of his assets. Respondent No. 1 (Commissioner) rejected the said application and held that failure of the WTO to initiate proceedings under section 18(1)(c) could not 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). On writ petition : HELD In the light of the propositions laid down in the various judicial pronouncements, it was to be seen whether the reasons assigned by respondent No. 1 for rejecting the application of the petitioner were legally correct. A perusal of the order passed by respondent No. 1 showed that he denied the benefit of the fiction contained in Explanation appearing below section 18B(1) by presuming that even though the penalty proceedings had not been initiated by the WTO 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. That was 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…

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