MOHAMMED ALI Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THESE applications under Art. 226 of the Constitution of India are directed against the order passed by the CWT, North Eastern Region, Shillong, passed under S. 18(2A) of the WT Act, 1957 (hereinafter referred to as "the Act". The assessee in the present cases submitted returns under the WT Act, for the asst. yrs. 1969-70 to 1971-72, voluntarily before the WTO, B-Ward, Gauhati. The returns were, however, submitted beyond the prescribed time. The WTO issued notice under S. 18(2) of the WT Act, directing the petitioner to show cause as to why an order imposing penalty for late submission of returns should not be made under S. 18(1)(a) of the Act. On receipt of the notice, the assessee moved petitions before the CIT under S. 18(2A) for waiver of the penalty imposable under S. 18(1)(a) on the ground that the petitioner voluntarily and in good faith made a full disclosure of his net wealth without any notice under S. 14(2) of the Act and that it was a fit case for a waiver of the penalty.

(2.) THE CWT found that the assessee submitted the returns voluntarily and made disclosure in good faith. It was further found that the assessee extended all co-operation in the enquiry regarding the assessment and in the completion of the assessment. On the basis of the aforesaid findings the CIT came to the conclusion that the assessee was entitled to relief under S. 18(2A) of the WT Act. THE CWT accordingly reduced the penalty to 25per cent of the minimum imposable under the Act. By the present petitions the assessee has challenged the said order of the CWT on the ground that all the conditions laid down in S. 18(2A) of the Act having been fulfilled, the CWT acted illegally in not waiving the entire amount of penalty. It is contended that the failure of the CIT to waive the entire penalty amounted to an arbitrary exercise of the power and a failure to exercise the duty cast under S. 18(2A). We have perused the order of the CIT. THE CIT has given no reasons as to why he has not waived the penalty in full but simply reduced it to 25per cent. THE power of the CIT to waive or reduce the penalty under S. 18(2A) is a quasi-judicial power.

(3.) OUR above reasons are also fortified by a decision of the Division Bench of this Court in Civil Rules Nos. 450-553 of 1975 [Baidya Nath Sarma vs. CWT, decided on 4th Feb., 1982--(1983) 140 ITR 801] and also a Single Bench decision of this Court in Civil Rule Nos. 356-361 of 1975 [Sardar Kartar Singh vs. CWT, decided on 9th July, 1981 reported in (1982) 135 ITR 379]. Accordingly, the impugned order passed by the CWT is set aside. The CWT is directed to pass fresh orders in accordance with law in the light of the observations made above.