D.V. Sehgal, J.
1. This judgment will dispose of C.W.Ps. Nos. 979 and 1052 of 1979 as these petitions involve common questions of law and fact.
2. Reference to the facts of C.W.P. No. 979 of 1979 would suffice to appreciate the nature of the dispute involved in these petitions. Wealth-tax on agricultural lands was imposed for the first time from the assessment year 1970-71, but the statutory enactment regarding imposition of this tax in the State of Punjab was held ultra vires the Constitution by this court. Later, on an appeal filed by the Union of India in the Supreme Court, the judgment of this court was reversed. The provisions for imposition of wealth-tax on agriculturists in Punjab thus became applicable with effect from the assessment year 1970-71. The agriculturists were, however, given concession to submit their returns on or before February 28, 1972, for the assessment years 1970-71 and 1971-72. The Wealth-tax Officer issued a notice to the petitioner under Section 17 of the Wealth-tax Act under date October 30, 1972/November 22, 1972, which was served on him on April 22, 1974. The proceedings were initiated on a survey report of the Inspector, much earlier to the service of the notice. He submitted his wealth-tax return on August 13, 1974, showing net wealth below the taxable limit. According to him, subsequently it came to his knowledge that his share in the agricultural lands was not 1/4th but in fact it was 3/10ths. He, therefore, submitted a revised return on March 17, 1977, showing net wealth of Rs. 1,44,420. The assessment was completed by the Wealth-tax Officer on March 25, 1977, on a total net wealth of Rs. 1,48,000 and penalty proceedings under Section 18(1)(a) of the Wealth-tax Act, 1957 (hereinafter called 'the Act'), were started against him. He submitted his reply in those proceedings which were dropped.
3. As regards the assessment year 1971-72, in response to the notice served on him on April 22, 1974, he submitted the wealth-tax return on August 13, 1974, showing his wealth below the taxable limit. However, on noticing the mistake mentioned above, he submitted a revised return on March 17, 1977, showing net wealth of Rs. 1,46,900. The assessment was completed on March 31, 1977, computing net wealth at Rs. 1,50,000 by taking the value of the agricultural land at Rs. 3,000 per acre of Barani as per the last assessment year instead of Rs. 2,500 per acre as mentioned in the return. Penalty proceedings under Section 18(1)(a) of the Act though initiated were later on dropped on a reply submitted by him. Again, for the assessment year 1972-73, he submitted the wealth-tax return suo motu on August 13, 1974, showing net wealth of Rs. 91,059, which was below the taxable limit. The Wealth-tax Officer was alleged to have issued to him notice under Section 14(2) or 17 of the Act which he alleges could not be served on him. Later on, he submitted a revised return on March 17, 1977, on noticing the mistake mentioned above as regards his share in the agricultural land and returned his net wealth at Rs. 1,45,900. The assessment was completed on March 25, 1977, on net wealth of Rs. 1,49,000. Penalty proceedings were initiated against him under Section 18(1)(a) of the Act. However, with regard to the assessment year 1973-74, without having received any notice under Section 14(2) or 17 of the Act, he suo motu submitted his wealth-tax return on August 13, 1974, showing net wealth of Rs. 84,059. He submitted a revised return on March 17, 1977, showing net wealth of Rs. 1,38,900. The assessment was completed on March 25, 1977, on the total net wealth of Rs. 1,42,000. The value of the agricultural land was taken at Rs. 3,000 instead of Rs. 2,500 per acre as shown by him in his return. Penalty proceedings under Section 18(1)(a) of the Act were initiated against him. For the assessment year 1974-75 again without receiving any notice under Section 14(2) of the Act, he suo motu submitted wealth-tax return on August 13, 1974, showing net wealth of Rs. 83, 854. Later on, detecting the mistake with regard to his share in the agricultural land, he submitted a revised return on March 17, 1977, showing net wealth of Rs. 1,69,595. The assessment was completed on March 25, 1'977, on the net wealth of Rs. 1,73,000. Penalty notice under Section 18(1)(a) of the Act was served on him. For the assessment year 1975-76, he submitted his wealth-tax return on December 24, 1976, in the status of a Hindu undivided family, for self and for his wife as he was married on March 2, 1975, without receiving any notice under Section 14(2) or 17 of the Act showing net wealth of Rs. 35,559, which was much below the taxable limit. Later on, when the mistake with regard to his share in the agricultural land was detected, he submitted a revised return on March 17, 1977, showing net wealth of Rs. 1,21,300. The assessment of wealth in the hands of his mother and sister was completed. He submitted yet another revised wealth-tax return on May 11, 1977, showing net wealth of Rs. 2,88,875 by taking the value of the Nehri agricultural land at Rs. 8,000 per acre as has been assessed in the case of his mother and sister instead of Rs. 5,500 per acre as shown in his earlier return. Likewise, the value of Barani land was also revised on the above basis to Rs. 4,500 instead of Rs. 3,000 per acre as originally shown. The assessment was completed on September 29, 1977, on the total wealth of Rs. 3,71,800. Penalty notice under Section 18(1)(a) of the Act was issued to him. For the assessment year 1976-77, without receiving any notice under Section 14(2) of the Act, he suo motu submitted his wealth-tax return on December 24, 1976, showing net wealth of Rs. 1,62,613 which was below the taxable limit. He submitted a revised return on March 17, 1977, showing net wealth of Rs. 2,80,013 on detecting the mistake with regard to his share in the agricultural land. He again revised his return on the basis of the enhancement of the value of Nehri and Barani lands by the Wealth-tax Officer in the assessment cases of his mother and sister and submitted the same on May 11, 1977. The assessment was completed on September 22, 1977, on a total wealth of Rs. 3,46,400. Penalty proceedings under Section 18(1)(a) of the Act were initiated against him.
4. The petitioner submitted an application under Section 18B of the Act for the assessment years 1972-73 to 1976-77 to the Commissioner of Wealth-tax, respondent No. 1, for waiver of the minimum penalty imposable under Section 18(1)(a) of the Act, inter alia, on the ground that he had submitted the returns suo motu without the issuance of any notice to him under Section 14(2) or 17 of the Act, that he had duly co-operated with the Department in the completion of the assessments and that the tax due had been duly paid. The application was, however, rejected by respondent No. 1, vide his order dated January 31, 1979, annexure P-6. The petitioner has accordingly challenged the impugned order, annexure P-6, and has prayed for a writ of certiorari for quashing the same by filing this writ petition.
5. Almost a similar order passed by respondent No. 1 in C.W.P. No. 1052 of 1979, annexure P-8, therein has been challenged by Manjit Singh, petitioner, in his case.
6. The learned counsel for the petitioner has contended that respondent No. 1 has proceeded on grounds which were not relevant for consideration under Section 18B of the Act and has wrongly rejected the application for waiver of the minimum penalty under this section,
7. Respondent No. 1 has set out in his order that notice under Section 14(2) of the Act for the assessment year 1972-73 was issued to the petitioner, though it could not be served on him. He has further mentioned that the course of events started with a survey report and the issuance of notices under Section 14(2) or 17 of the Act go against the assessee's claim that the declaration of wealth by him was voluntary. It has been further mentioned that filing of the second revised returns for the years 1975-76 and 1976-77 on the determination of a higher value for the land in the related cases of the petitioner's mother and sister and the enquiries launched by the Wealth-tax Officer with the patwari regarding the valuation of the land show that the petitioner's claim that the declaration of wealth by him was voluntary and in good faith is not correct.
8. After hearing the learned counsel for the parties, I am of the view that the order, annexure P-6, passed by respondent No. 1 cannot be sustained. The five conditions laid down in Section 18B of the Act, which are fundamental to the exercise of discretion by the Commissioner to reduce or waive penalty in certain cases, are--
(i) that the returns were filed by the assessee prior to the issuance of a notice under Section 14(2);
(ii) that these were filed voluntarily and in good faith ;
(iii) that the assessee had made a full and true disclosure of his income;
(iv) that he had co-operated in the enquiry relating to the assessment of his net wealth ;
(v) that he had paid or made satisfactory arrangements for the payment of the tax.
9. While considering whether the assessee satisfied the above-said five conditions, the Commissioner has to remain uninfluenced by extraneous considerations. The facts noticed by respondent No. 1--that the notice under Section 14(2) or Section 17 of the Act, though issued to the petitioner, had not been served on him or that the revised return had been filed by him after the valuation of agricultural lands had been enhanced in the wealth-tax cases of his mother and sister or that an enquiry as regards the valuation had been directed by the Wealth-tax Officer to the patwari are extraneous considerations and are collateral in nature. These were not germane for finding out whether the five conditions mentioned above as laid down in Section 18B of the Act were satisfied by the petitioner and whether or not he was entitled to the relief or waiver of the minimum penalty provided by the Act. I find support for this view from a Division Bench judgment of this court in Smt. Parkash Devi v. CWT .
10. There is, therefore, no escape from the conclusion that for the reasons stated above, the impugned order passed by respondent No. 1 is ultra vires the provisions of Section 18B of the Act and is, therefore, unsustainable and is liable to be quashed.
11. For the reasons stated above, I allow these writ petitions, quash the order, annexure P-6, in C.W.P. No. 979 of 1979 and annexure P-8 in C.W.P. No. 1052 of 1979 and direct respondent No. 1 to rehear the applications of the petitioners for grant of relief under Section 18B and record his satisfaction on the conditions provided therein and pass necessary orders in accordance with law. There shall be no order as to costs.