SATISH CHANDRA, C.J. - (1.) THE applicant -HUF filed returns under the W.T. Act for the years 1965 -66 to 1973 -74 on July 8, 1974. The net wealth returns were accepted by an assessment order dated July 27, 1974. The WTO, Kanpur, after accepting the returns, assessed the wealth -tax. The tax demanded was paid in due course,
(2.) THE WTO under Section 18(1)(a) of the W.T. Act can impose penalties for the delayed filing of returns. After hearing the assessee, he imposed penalties for various years as follows : Asst. year Penaltyimposed Rs. 1965 -66 1,69,497 1966 -67 1,86,585 1967 -68 1,84,358 1968 -69 1,87,338 1969 -70 1,87,521 1970 -71 1,47,756 1971 -72 1,01,018 1972 -73 74,411 1973 -74 28,691 Total 12,67,175 The assessee made an application which was treated to be under Section 18B of the W.T. Act, The Commissioner dismissed that application by an order dated January 21, 1978. He refused to waive the penalty on the ground that the assessee was not making a full and true disclosure of his assets. He held that although the assessee was liable to wealth -tax for the assessment years 1956 -57 to 1964 -65 he did not file returns for these years. The assessee's contention was that this matter was discussed with the previous Commissioner and then as a result of some understanding between him and the earlier Commissioner he did not file returns for these years. The Commissioner held that there was nothing on record to substantiate this contention and the assessee's failure to file return prior to 1965 -66 smacked of lack of an element of good faith in making the disclosure. It also amounted to making only a partial disclosure. On these findings, the application for waiver of penalties was rejected.
(3.) THE learned counsel for the petitioner submitted that phrases 'good faith' and 'true and full disclosure' occurring in Section 18B of the W.T. Act, on a proper construction, implied that the conduct of the assessee in so far as it was relevant for the assessments, for the years for which the returns were filed, alone was capable of being considered. His conduct in relation to the previous assessment years was neither material nor can it be taken notice of. The Commissioner was hence in error in considering the fact that the assessee had not filed his returns for the assessment years prior to 1965 -66.;