Reasoned penalty orders under the Wealth-tax Act are mandatory; a non-speaking penalty was set aside and remitted.

A penalty under the Wealth-tax Act for failure to file the net wealth return on time was held unsustainable because the order was non-speaking and lacked recorded reasons. The High Court noted that the authority did not disclose the basis for computing the penalty or for rejecting the assessee's explanation, and that a quasi-judicial decision must be reasoned. The penalty order was therefore set aside, and the matter was remitted to the competent authority for rehearing and fresh decision in accordance with law.

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Issues: Whether the penalty order passed under the Wealth-tax Act could be sustained when it was not a speaking order and the authority had not recorded reasons.

Analysis: The penalty was imposed for failure to furnish the return of net wealth within time. The order was found to be non-speaking and did not disclose the basis on which the penalty was computed or the reasons for rejecting the assessee's explanation. In a quasi-judicial proceeding, the authority was required to pass a reasoned order.

Conclusion: The penalty order was not sustainable and was set aside, with the matter remitted to the competent authority for rehearing and decision in accordance with law.

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