Bhailal Punamchand Gandhi and Another vs Commissioner of Wealth Tax

P.R. Gokulakrishnan, C.J.—Rule. Mr. R. P. Bhatt, appears and waives service of rule.

This special civil application is directed against the order passed by the Commissioner of Wealth-tax which is at annexure "A-5" to the special civil application. The petitioner herein filed a petition u/s 18B of the Wealth-tax Act for waiving the penalty u/s 18(1)(a) for the assessment years 1967-68, 1968-69 and 1969-70.

On prior notice served upon the respondent, Mr. R. P. Bhatt appears and states that the petitioners have not made payment of wealth-tax for the years in question. The Commissioner of Wealth-tax dismissed the petition on two grounds, viz. :

(1) The petitioners have not paid the wealth-tax for the years 1967-68 to 1969-70; and

(2) That section 18B is not applicable since it came into force only on October 1, 1975.

It is clear from the facts of the case even prior to the amendment, inserting section 18B in the Wealth-tax Act, 1957, by the Taxation Laws (Amendment) Act, 1975, the waiver at the discretion of the Commissioner of Wealth-tax was there by virtue of the relevant section 18(2A) of the Wealth-tax Act.

Mr. Pathak, appearing for the petitioners, submits that the tax payable for the years 1967-68, 1968-69 and 1969-70 comes to Rs. 68, Rs. 205 and Rs. 257, respectively. It has also been brought to out notice that the penalty levied is Rs. 1,400, Rs. 1,850 and Rs. 8,480, respectively, for the years 1967-68, 1969-70. Mr. Pathak, for the petitioners, also states that he is having the challans for the payment of wealth-tax having been made in time in respect of these years. He also points out that his clients'' reply is at annexure "A-4" to the special civil applications and states that his client has made a representation to the Commissioner of Wealth-tax as early as on December 24, 1988, mentioning that wealth-tax for the years in question has been paid. Inasmuch as the petitioners have paid the wealth-tax for which Mr. R. D. Pathak, for the petitioners, states that necessary challans are available, they can as well produce those challans before Commissioner of Wealth-tax.

In view of the fact that the Commissioner of Wealth-tax had the power u/s 18(2A) and that the challans are available for the payment of wealth-tax having been made for the assessment years in question, this case can be remanded to the file of the Commissioner of Wealth-tax in order to pass a fresh order after giving an opportunity to the petitioners to place their case. It is for the Commissioner of Wealth-tax to discuss and decide on the facts and circumstances of the case as to whether the petitioners are entitled for waiver of the penalty levied u/s 18(1)(a) of the Wealth-tax Act for the assessment years 1967-68, 1968-69 and 1969-70.

In view of the discussion made above, the order passed by the Commissioner of Wealth-tax is set aside the matter is remanded to the Commissioner of Wealth-tax for disposal afresh in the light of the observations we have made in the foregoing paragraphs.

The Commissioner of Wealth-tax is directed to dispose of this matter preferably within a period of three months from today. Writ to be sent to the Commissioner of Wealth-tax, Gujarat-1, Ahmedabad. Rule is made absolute to the above extent.