SHANKARA APAYA SWAMI Vs. WEALTH TAX OFFICER

JUDGEMENT

(1.) THE petitioner in these two writ petitions was an assessee under the Wealth-tax Act, 1957 (hereinafter referred to as "the Act"), during the assessment years 1969-70 and 1970-71. He filed the returns pertaining to those two assessment years beyond the prescribed time. THE Wealth-tax Officer, being of the opinion that there was no reasonable cause for filing the returns beyond time, made an order under the provisions of section 18(1)(a) of the Act calling upon the petitioner to pay penalties as provided by law. Aggrieved by the orders passed by the Wealth-tax Officer levying the penalties, the petitioner approached the Commissioner of Wealth-tax with applications under sub-section (2A) of section 18 of the Act, requesting him to exercise his discretion and to reduce or waive the amount of penalties imposed on him. THE Commissioner rejected both the applications. While doing so, he observed as follows :

(2.) THE portion of the order of the Commissioner extracted above shows that the Commissioner while he disposed of the two petitions before him only considered whether the petitioner had reasonable cause for not filing the returns in time. Such investigation would be germane to the determination of the liability under section 18(1)(a), because on reasonable cause being shown for filing the returns beyond time, the assessee would be entitled to be exonerated from the liability to pay the penalties. This is a matter which falls within the jurisdiction of the Wealth-tax Officer, and if he commits an error in exercising his jurisdiction, it would be open to the Commissioner to correct it in the exercise of powers of revision under the Wealth-tax Act. In these cases, the petitioner requested the Commissioner to exercise his power under section 18(2A) of the Act which empowered him to reduce or waive the penalty imposable under section 18(1) of the Act, notwithstanding the provisions contained in section 18(1) of the Act. In cases coming under section 18(2A) of the Act, the considerations which should weigh with the Commissioner necessarily have to be different from the considerations which would weigh while determining whether the assessee has reasonable cause for not filing the returns in time or not. It is not the case of the authorities that the assessee has failed to disclose all his wealth which is liable to payment of wealth-tax. THE penalties levied for the year 1969-70 is Rs. 6,318 and for the year 1970-71 is Rs. 7,560, whereas the tax payable was Rs. 162 and Rs. 280 respectively.

(3.) IT is needless to mention that the Commissioner while exercising his discretion under section 18(2A) has to bear in mind several factors such as the gravity of the default, the loss occasioned to the revenue by the assessee not filing the return in time, and the extent of tax withheld. These factors are only illustrative but not exhaustive. Just like in criminal cases a judge while imposing a sentence on the accused who is found guilty of an offence takes into consideration several factors apart from the fact that he has committed the offence in question, the Commissioner should take into consideration all other relevant factors while reducing or waiving the penalty imposed or imposable under section 18(1)(a) of the Act.