TMI Blog1997 (9) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... South Arcot District, in G. I. No. 3601-S. On September 3, 1972, there was a search by the Intelligence Department in the business premises of the petitioner's husband and gold jewels weighing about 21 kilos and silver articles weighing about 2.5 kilos were seized. Assessment proceedings were initiated by the Income-tax Department in pursuance of the alleged materials gathered during the search and on the basis of the seized articles. In 1975, the Government of India brought a scheme known as "Voluntary Disclosure of Income and Wealth". The petitioner opted for settling the dispute under the scheme. Accordingly, the tax due on the income assessed for the assessment year 1972-73 had been paid. However, the seized gold and silver articles wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first respondent stating the reasons to waive interest. However, the first respondent having rejected the petition on the ground that the petitioner had not satisfied the conditions laid down under section 220(2A), the present writ petition has been filed. The grounds raised in the writ petition are as under : The writ petitioner had complied with the three conditions laid down under section 220(2A) of the Act. Her non-payment of the tax amount was due to reasons beyond her control as the jewellery seized was not released by the Department. She had also co-operated in the enquiry relating to the assessment and the proceedings for the recovery. She had also to borrow huge amounts to pay the tax and payment of interest under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he income voluntarily disclosed under the Scheme ought to be paid before the application is filed and in the instant case the tax payable on the income disclosed was not paid before the application was made and hence, though the respondents would have been justified in rejecting the petition under the Voluntary Disclosure Scheme and made a regular assessment resulting in the levy of interest under sections 139(8) and 217 as well as the penalty under section 271(1)(a) valid, the respondents did not resort to the said procedure and waived the interest levied under sections 139(8) and 217. The question of waiver of interest leviable under section 220(2) for non-payment of tax is not available to the disclosures made under the Voluntary Disclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Harbans Kaur v. CWT [1997] 224 ITR 418 observed as follows : "The words 'the Commissioner may in his discretion... reduce or waive the amount of penalty' in section 18B of the Wealth-tax Act, 1957, clearly show that the power conferred on the Commissioner is to be exercised by him in such manner as he deems just and proper. If the conditions stipulated in the section are satisfied, the Commissioner has a discretion in the matter. In exercise of that discretion, the Commissioner can either reduce the amount of penalty or he may waive the entire penalty. It is for the Commissioner to decide on the facts of a particular case whether a waiver in entirety or a reduction alone is warranted. Of course, when the Commissioner, instead of giving a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the Department that under the Voluntary Disclosure Scheme, there can be no waiver of interest. However, that is not the reason given by the first respondent in rejecting the application of the writ petitioner for waiver of interest. What the first respondent has stated in the order is that the conditions as laid down in section 220(2A) are not satisfied in the instant case and not that cases coming under the Voluntary Disclosure Scheme are outside the purview of section 220(2A) for waiver of interest. In these circumstances, the writ petitioner is entitled to succeed, and the writ petition is allowed. The order of the first respondent dated March 25, 1987 in F. No. 404/279 of 1985-ITCC is quashed. In view of the fact that the powers un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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