N. Ramachandran vs Commissioner of Wealth Tax and Others

T. Kochu Thommen , J.—By the impugned order, exhibit P-7, the first respondent, the Commissioner of Wealth-tax, in exercise of his discretion under Sub-section (2A) of Section 18 of the Wealth-tax Act, 1957, as it then stood, waived the penalty levied u/s 18(1)(a) in respect of the assessment year 1972-73, but only reduced the penalty in respect of the assessment years 1973-74 and 1974-75. In respect of the last two years, the reduction was by Rs. 30,000 and Rs. 25,000, respectively. The reason stated by the Commissioner for this differential treatment was that for the assessment year 1972-73, for which penalty was wholly waived, the petitioner filed returns within 10 months after the due date and, therefore, there was no inordinate or unconscionable delay. For the assessment years 1973-74 and 1974-75, the delay was 64 months and 52 months, respectively. What apparently weighed with the Commissioner in the exercise of his discretion by waiver in respect of one year and reduction in respect of the other two years was, therefore, the relative length of delay.

Counsel for the petitioner, Shri C.M. Devan, submits that the Commissioner did not exercise his discretion judiciously. Counsel says that Sub-section (2A) of Section 18 postulates that in cases where the Commissioner is satisfied that the assessee has made full disclosure of his wealth voluntarily and in good faith, he should, in his discretion, either reduce or waive the amount of minimum penalty. In the present case, the Commissioner waived it in one case, but only reduced it in the other two cases, although in all the three cases, the disclosure was admittedly voluntarily made and there was no lack of good faith.

Sub-section (2A) confers a discretion on the Commissioner. The discretion is that of the Commissioner alone and of no one else. Sub-section (2B) says that an order under Sub-section (2A) shall be final and shall not be called in question in any other proceeding. Although this court has the power, in exercise of the extraordinary jurisdiction under Article 226 of the Constitution, to interfere in certain circumstances with an order made under Sub-section (2A) of Section 18, notwithstanding the finality clause, nevertheless this court would not attempt to substitute its own discretion for that of the statutory repository of power. The circumstances which arise in the present case do not warrant any interference. Although the assessee has made a full disclosure voluntarily and is not shown to be lacking in good faith, nevertheless it is perfectly within the discretion of the Commissioner to distinguish between cases on the basis of the relative length of delay. That was a rational differentiation. The discretion was thus rightly and judiciously exercised and we see no reason to interfere with it.

In the circumstances, the petition is dismissed. No costs.