Kerala H.C : Waived the penalty levied under s. 18(1)(a) in respect of the asst. yr. 1972-73

High Court Of Kerala

N. Ramachandran vs. Commissioner Of Wealth Tax & Ors.

Sections WT 18(1)(a), WT 18(2A)

Asst. Year 1973-74, 1974-75

T. Kochu Thommen & M. Fathima Beevi, JJ.

Orig. Petn. No. 6381 of 1981

18th February, 1988

Counsel Appeared

O. P. No. 6381 of 1981 : C. M. Devan, for the Petitioner


By the impugned order, exhibit P-7, the first respondent, the CWT, in exercise of his discretion under sub-s. (2A) of s. 18 of the WT Act, 1957, as it then stood, waived the penalty levied under s. 18(1)(a) in respect of the asst. yr. 1972-73, but only reduced the penalty in respect of the asst. yrs. 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 CIT for this differential treatment was that for the asst. yr. 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 asst. yrs. 1973-74 and 1974-75, the delay was 64 months and 52 months, respectively. What apparently weighed with the CIT 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 CIT did not exercise his discretion judiciously. Counsel says that sub-s. (2A) of s. 18 postulates that in cases where the CIT 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 CIT 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-s. (2A) confers a discretion on the CIT. The discretion is that of the CIT alone and of no one else. Sub-s. (2B) says that an order under sub-s. (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 Art. 226 of the Constitution, to interfere in certain circumstances with an order made under sub-s. (2A) of s. 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 CIT 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.

[Citation : 170 ITR 447]

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