SHAKUNTLA MEHRA Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) BY this petition under Art. 226 the Constitution of India, the petitioner, Smt. Shakuntla Mehra, challenges the order dt. 8th Nov., 1971, passed by the CWT, Haryana, Himachal Pradesh and Delhi, under S. 18(2A) of the WT Act, 1957. She further prays that along with the quashing of the said order all proceedings that may arise as a consequence of it may also be quashed and the WTO, District III, Ward VII, New Delhi, be restrained from imposing any penalty. It is also prayed by the petitioner that a direction be issued to the CWT to reconsider the petitioner's application under S. 18(2A) of the WT Act and pass a considered order on it in accordance with law.

(2.) THE petitioner is the widow of one late Shri Mohan Lal Mehra, who died on 4th April., 1964. The said Mohan Lal Mehra was an assessee under the INCOME TAX ACT, 1961. The petitioner was not an assessee during the lifetime of her husband. She also claims that she is an uneducated lady and knew nothing about tax laws nor dealt with any financial matters during the lifetime of her husband. Her eldest son had died in 1968 and her youngest son is mentally undeveloped from birth. She has one other son, Moti Lal Mehra, who was also inexperienced and unaware of taxation and financial matters. During the life time of her husband there was no tax consultant or lawyer engaged to look after the tax and financial matters of the family. Consequently, no returns were filed after the death of Mohan Lal Mehra till May, 1971. Moti Lal Mehra, son of the petitioner, did attend to the routine assessments after the death of his father and the petitioner was assessed to income -tax for the asst. year 1965 -66 for the first time on 10th May, 1968. It is contended that in or about April/May, 1971, a well wisher of the family advised the petitioner to examine the liability to file wealth -tax returns as a consequence of the devolution of the estate of Mohan Lal Mehra on the petitioner and her two sons. It was then discovered by the petitioner that she was liable to wealth - tax for the asst. yr.1965 -66. Accordingly, the petitioner voluntarily filed WT returns for the asst. yrs. 1965 -66 to 1970 -71 on 25th May, 1971. She filed revised WT returns for these years, again voluntarily, on 28th June, 1971, and paid a sum of Rs. 9,329 being full wealth -tax due on self - assessment. The assessments on these returns were completed on 23rd Oct., 1971, and returns filed by the petitioner were accepted. Earlier, on 24th Aug. , 1971, the petitioner moved the Commissioner under S. 18(2A) praying for waiving of the penalty. The Commissioner on this application passed the impugned order dt. 8th Nov., 1971, directing imposing of 5 per cent of the penalty leviable which on the basis of the assessment comes to Rs. 10,578. On 23rd Feb., 1972, the petitioner moved the CBDT that she be heard before her application under S. 18(2A) was disposed of as according to her the order of 8th Nov., 1971, was passed without giving her any hearing. The Commissioner gave the petitioner hearing on 14th Dec., 1972, when written submission were filed on her behalf. On 9th Jan., 1974, the petitioner was informed that the Commissioner did not find any ground to interfere with his earlier order. The WTO thereupon issued notices to the petitioner to show cause against the levy of penalty under S. 18(1)(a). The petitioner thereupon filed the present petition and also moved an application for interim stay (CM 251 -W/74). Interim stay was granted by this Court and the WTO was restrained from passing any penalty orders. These orders were passed ex parte on 18th Feb., 1974, and were served on the WTO. Despite notice, no one appeared to oppose the application and so the ex parte interim stay was made absolute on 20th March, 1974.

(3.) THE issue of writ is opposed on the ground that the Commissioner has exercised his discretion under the statute which cannot be interfered with. Penalty has since been imposed and inasmuch as those orders are not challenged, they have become final. It is contended that once the Commissioner has passed orders under S. 18(2A) he becomes functus officio. It is further submitted that the CBDT could issue no directions to the Commissioner to give a fresh hearing to the petitioner and so the second order passed by the Commissioner as communicated to the petitioner on 9th Jan., 1974, is no order in the eye of law. Adverting to the penalty orders having been passed it is contended that even if the Commissioner's orders are now set aside the writ would be infructuous.