Voluntary wealth return filing in good faith before notice can justify waiver of penalty where the disclosed assets are accepted.

Voluntary filing of wealth returns in good faith before notice under section 14(2), followed by departmental acceptance of the disclosed wealth, satisfied the statutory basis for waiver of penalty under section 18B(1)(a) of the Wealth-tax Act, 1957. The refusal to grant waiver could not be justified by the fact that income-tax had been paid regularly from an earlier assessment year, as that consideration was held irrelevant to the waiver inquiry. The refusal order was therefore unsustainable, and the penalties for the relevant assessment years were quashed.

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Issues: Whether the petitioner was entitled to waiver of penalty under section 18B(1)(a) of the Wealth-tax Act, 1957 on the basis that the wealth returns were filed voluntarily and in good faith before notice under section 14(2), and that the disclosed wealth was accepted.

Analysis: The returns for the relevant assessment years were filed by the petitioner after attaining majority and before any notice under section 14(2) was received. The wealth disclosed in those returns was accepted by the department. These facts established the petitioner's bona fides and satisfied the requirements for waiver. The reasoning that income-tax had been regularly paid from an earlier assessment year was held to be misconceived and did not justify refusal of waiver.

Conclusion: The petitioner was entitled to waiver under section 18B(1)(a); the refusal order was unsustainable.

Final Conclusion: The writ petition succeeded, the Commissioner's order declining waiver was quashed, and the penalties imposed for the relevant assessment years were also quashed.

Ratio Decidendi: Where a taxpayer files wealth returns voluntarily and in good faith before notice and the disclosed wealth is accepted, the statutory requirements for waiver are satisfied and refusal of waiver is unjustified.

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