18B. Power to reduce or waive penalty in certain cases.
1[18B. Power to reduce or waive penalty in certain cases. —(1) Notwithstanding anything contained in this Act, the 2[ 3[***] Commissioner] may, in his discretion, whether on his own motion or otherwise,—
(ii) reduce or waive the amount of penalty imposed or imposable on a person under clause (iii) of sub-section (1) of section 18, it he is satisfied that such person,—
(b) in the case referred to in clause (ii), has, prior to the detection by the 6[Assessing Officer], of the concealment of particulars of assets or of the inaccuracy of particulars furnished in respect of any asset or debt in respect of which the penalty is imposable, voluntarily and in good faith made full and true disclosure of such particulars, and also has co-operated in any inquiry relating to the assessment of his net wealth and has either paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year.
7[ Explanation 1 ].—For the purposes of this sub-section, a person shall be deemed to have made full and true disclosure of the particulars of his assets or debts in any case where the excess of net wealth assessed over the net wealth returned is of such a nature as not to attract the provisions of clause (c) of sub-section (1) of section 18.
(2) Notwithstanding anything contained in sub-section (1), if in a case falling under clause (c) of sub-section (1) of section 18, the net wealth in respect of which the peanlty is imposed or imposable for the relevant assessment year, or, where such disclosure relates to more than one assessment year, the net wealth for any one of the relevant assessment years, exceeds five hundred thousand rupees, no order reducing or waiving the penalty under sub-section (1) shall be made by 9[the Commissioner except with the previous approval of the Chief Commissioner, or Director-General, as the case may be].
(3) Where an order has been made under sub-section (1) in favour of any person, whether such order relates to one or more assessment years, he shall not be entitled to any relief under this section in relation to any other assessment year at any time after the making of such order:
10[Provided that where an order has been made in favour of any person under sub-section (1) on or before the 24th day of July, 1991, such person shall be entitled to further relief only once in relation to other assessment year or years if he makes an application to the wealth-tax authority referred to in sub-section (4) at any time before the 1st day of April, 1992].
(4) Without prejudice to the powers conferred on him by any other provision of this Act, the 11[ 12 [***] Commissioner] may, on an application made in this behalf by an assessee, and after recording his reasons for so doing, reduce or waive the amount of any penalty payable by the assessee under this Act or stay or compound any proceeding for the recovery of any such amount, if he is satisfied that—
(i) to do otherwise would cause genuine hardship to the assessee, having regard to the circumstances of the case, and
(ii) the assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him.
(5) Every order made under this section shall be final and shall not be called into question by any court or any other authority.]
13[(6) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1989, shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.]
(i) The words “the Commissioner may in his discretion…reduce or waive the amount of penalty” in this section are clear enough to show that the power conferred on the Commissioner is to be exercised fairly and not arbitrarily, justily and not fancifully; Harbans Kaur v. Commissioner of Wealth-tax, Jullundur, JT 1997 (l) SC 471.
(ii) When the Commissioner, instead of giving a complete waiver, chooses to give only a reduction for the penalty amount he must indicate in his order that he has applied his mind in that regard; Harbans Kaur v. Commissioner of Wealth-tax, Jullundur , JT 1997 (1) SC 471.
(iii) It is certainly not the intention of the said provision that the Commissioner, if satisfied of the compliance of conditions, has only one choice to waive the penalty in entirety. So, it does not imply that the Commissioner can in case where conditions are not satisfied, reduce the penalty amount. In fact, when conditions are not satisfied, the Commissioner cannot do either. It is only when the said conditions are satisfied that the Commissioner can exercise his discretion and not before; Harbans Kaur v. Commissioner of Wealth-tax, Jullundur, JT 1997 (1) SC 471.
1. Ins. by Act 41 of 1975, sec. 92 (w.e.f. 1-10-1975).
2. The words “Chief Commissioner or Commissioner” subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).
3. The words “Chief Commissioner or“ omitted by Act 38 of 1993, sec. 40(a) (w.e.f. 1-6-1993).
4. Clause (i) omitted by Act 3 of 1989, sec. 70(a)(i) (w.e.f. 1-4-1989).
5 Clause (a) omitted by Act 3 of 1989, sec. 70(a) (ii) (w.e.f. 1-4-1989).
6. Subs. by Act 4 of 1988, sec. 127, for “Wealth-tax Officer” (w.e.f. 1-4-1988).
7. Explanation renumbered as Explanation 1 by Act 67 of 1984, sec. 58(a) (w.e.f. 1-10-1984).
8. Explanation 2 omitted by Act 32 of 1985, sec. 38 (w.e.f. 24-5-1985). Earlier Explanation 2 was inserted by Act 67 of 1984, sec. 58(b) (w.e.f. 1-10-1984).
9. Subs. by Act 38 of 1993, sec. 40(b), for “The Chief Commissioner or Commissioner, except with the previous approval of the Board” (w.e.f. 1-6-1993).
10. Ins. by Act 49 of 1991, sec. 76 (w.e.f. 27-9-1991).
11. The words “Chief Commissioner or Commissioner” subs. by Act 4 of 1988, sec. 127, for “Commissioner” (w.e.f. 1-4-1988).
12. The words “Chief Commissioner or” omitted by Act 38 of 1993, sec. 40(c) (w.e.f. 1-6-1993).
13. Ins. by Act 3 of 1989, sec. 70(b) (w.e.f. 1-4-1989).