JUDGMENT R.K. Gulati, J. 1. This writ petition is filed challenging the order dated December 21, 1979, under Section 18B(1) of the Wealth-tax Act, 1957 (for short, "the Act"), by which the Commissioner of Wealth-tax, Meerut, has rejected in part an application for waiver or reduction of penalty, filed by one Sardar Jeewan Singh (since deceased), father of the first petitioner. Another challenge is to three notice letters issued under Section 226(3) of the Income-tax Act, 1961, by the Income-tax Officer (Wealth-tax) 'E' Ward, Saharanpur, by which the second petitioner, Messrs. Rana Rubber Industries, a partnership firm and its banker were required to remit Rs. 26,539 to the Department from any amount due to Sardar Jeewan Singh/Rana Rubber Industries in satisfaction of the arrears being the amount of penalty under Section 18(1)(a) of the Act in respect of the assessment year 1968-69 imposed on Sardar Jeewan Singh and interest due thereon. 2. While entertaining the writ petition by an order dated March 3, 1982, this court had granted the following interim order : "Issue notice. Meanwhile, the operation of the notices dated December 31, 1981, and January 30, 1982, as modified by the order dated February 6, 1982, shall remain stayed provided petitioner No. 1 furnishes security to the satisfaction of the Income-tax Officer (Wealth-tax), 'E' Ward, Saharanpur, within a month from today and deposits one-fourth of the amount due within a period of three months from today and thereafter goes on depositing an equal amount every quarter till the entire demand against the father of petitioner No. 1, i.e., Sardar Jeewan Singh, covered by the notices stands satisfied." During the course of hearing, learned counsel for the petitioner did not address us on the validity of the notices under Section 226(3) aforesaid ; presumably, the amount must have been paid in due course by the first petitioner in pursuance of the order passed by this court. We are, therefore, not required to go into the validity to the challenge or into the correctness or otherwise of the notices issued under Section 226(3). 3. Now, coming to the challenge to the order passed by the Commissioner under Section 18B(1) of the Act, it is necessary to set out a few facts which have a bearing on the controversy involved. 3. Now, coming to the challenge to the order passed by the Commissioner under Section 18B(1) of the Act, it is necessary to set out a few facts which have a bearing on the controversy involved. It appears that Sardar Jeewan Singh, during his lifetime, filed his wealth-tax returns on or about July 23, 1974, for eight assessment years, namely, 1966-67 to 1973-74, for which he was assessed to wealth-tax. On completion of the assessments, not only notices for penalty were issued for late filing of the returns but penalties of varying amounts were also imposed for all those years. For the assessment year 1968-69, a penalty of Rs. 19,807 was imposed. Thereafter, Sardar Jeewan Singh applied to the first respondent under Section 18B(1) of the Act for waiver/reduction of the amounts of penalty imposed on him. The first respondent waived the penalties in full in respect of all the years except for the assessment year 1968-69. After the death of Sardar Jeewan Singh, his son, the first petitioner has filed the present writ petition, impugning the order of the Commissioner in so far as it concerns the assessment year 1968-69. 4. No counter-affidavit has been filed on behalf of the respondents. We have heard learned counsel for the parties. Before proceeding further, we may also refer to the relevant portion of the order of the Commissioner by which he declined to grant the waiver application for the assessment year 1968-69. It reads as under : "Original return in this case was filed on July 23, 1974, net wealth was returned at Rs. 1,57,196. The Wealth-tax Officer found that the assessee had not disclosed a deposit item of Rs. 5,460 with Messrs. Anoop Singh Jeewan Singh. The deposit of Rs. 5,460 was, therefore, added to the total wealth. It is, therefore, clear that the disclosure of wealth for this assessment year 1968-69 cannot be called full or complete or in good faith. The penalty, therefore, cannot be waived and the application for this year is rejected." 5. For the petitioner, it was contended that the return for the year in dispute, as in other years, was filed voluntarily and in good faith, making a full and true disclosure of net wealth. However, under a bona fide mistake, a paltry sum of Rs. The penalty, therefore, cannot be waived and the application for this year is rejected." 5. For the petitioner, it was contended that the return for the year in dispute, as in other years, was filed voluntarily and in good faith, making a full and true disclosure of net wealth. However, under a bona fide mistake, a paltry sum of Rs. 5,000 odd was omitted to be included initially but, immediately on getting the information during the course of assessment proceedings, that amount was agreed to be included in the assessment and was factually brought to tax without any protest. The argument was that mere addition in the wealth-tax return filed by the assessee, which could not be shown in the return under a bona fide mistake, would not ipso facto amount to having not made a full and true disclosure of the net wealth nor could the disclosure in question have been branded as not made in good faith. Our attention was also invited to the Explanation appended to Section 18B(1) of the Act, which elaborates and furnishes a statutory fiction for the purposes of finding out whether there had been a full and true disclosure of net wealth. It provides that a person shall be deemed to have made full and true disclosure 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. We were also referred to the assessment order for the assessment year 1968-69 to show that, in the instant case, no proceedings for penalty were initiated under Section 18(1)(c) of the Act. It was also argued that the Commissioner had failed to record any finding as to whether non-inclusion of the amount of Rs. 5,000 odd was not on account of an honest mistake which did not lack good faith. 6. It was also argued that the Commissioner had failed to record any finding as to whether non-inclusion of the amount of Rs. 5,000 odd was not on account of an honest mistake which did not lack good faith. 6. Now, a perusal of Section 18B(1) of the Act would show that these provisions vest the Commissioner of Wealth-tax with discretion to waive or reduce the amount of penalty imposed or imposable for defaults under Clauses (i) and (iii) of Sub-section (1) of Section 18 of the Act, i.e., penalty for late filing of the return and for concealment of particulars of wealth or for furnishing incorrect particulars of assets or debts, on fulfilment of certain requirements specified in that behalf. In order to avail of the Commissioner's discretion of waiver, etc., in respect of an amount of penalty for late filing of the return, three conditions which are cumulative are required to be satisfied. One of these conditions is that the assessee should have voluntarily and in good faith made a full and true disclosure of his net wealth prior to the issue of notice under Section 14(2) of the Act. The other two conditions are : (i) the assessee must cooperate in the enquiry relating to the assessment of his net wealth, and (ii) the assessee has either paid or made satisfactory arrangement for the payment of tax or interest in respect of the relevant assessment year. There is no dispute that the last mentioned two conditions stood fully satisfied. There is also no dispute that the return was filed voluntarily before the issuance of the notice under Section 14(2) of the Act. The dispute is whether the assessee had "in good faith" made a full -and true disclosure of his net wealth. Now, what does "good faith" mean? These two English words have several shades of meaning and in a popular sense, may mean honestly, without fraud, without pretence, the condition of acting without knowledge of fraud and without intent to assist or act in furtherance of a fraudulent or otherwise unlawful scheme (see Words: and Phrases, Permanent Edition, Vol. 18-A, page 91). The expression "good faith" used in Section 18B(1) has not been defined in the Act. 18-A, page 91). The expression "good faith" used in Section 18B(1) has not been defined in the Act. However, under the General Clauses Act, a thing shall be deemed to be done in good faith where it is, in fact, done honestly, whether it is done negligently or not. What meaning the phrase "in good faith" should receive in the context in which these words are used in Section 18B(1) or were employed in Section 18(2A) before it was omitted and the present section was inserted by the Amendment Act, 1975, or in the corresponding Section 273A under the Income-tax Act, 1961, where a similar expression is used, has been the subject-matter of discussion in several cases before this court as well as before other High Courts. It may be noticed that the provisions of Section 18(2A) of the Wealth-tax Act, 1957, before their deletion, were in pari materia with the present provisions of Section 18B(1) of the Act. In Hasan Ahmad Khan v. CWT [1975] 99 ITR 414, a Division Bench of this court, while dealing with a case concerning Section 18(2A), as it then stood, ruled as under (at page 417) : ". . . . the condition precedent for exercising jurisdiction under Section 18(2A) is satisfied where an assessee, whether negligently or not, has, while making full disclosure of his net wealth, acted honestly. This necessarily implies that in some cases the assessee might be negligent in making a disclosure about his net wealth, and that is why the net wealth disclosed by him may not be found to be correct, but if he honestly thought that he had fully disclosed his net wealth he would not he lacking in good faith. In such a case although the disclosure made by him is ultimately found to be inaccurate, it would not be possible to say that while making a full disclosure of his net wealth the assessee did not act in good faith. In our opinion, in the context, the question whether the assessee made a full disclosure of his net wealth or not, has not to be looked into with reference to the net wealth as ultimately evaluated by the Wealth-tax Officer, but from the point of view of the assessee, i.e., whether or not while disclosing his net wealth fully, he acted honestly." 7. In the light of the above decision, for any disclosure to be "full and true", the requirement of law is that it must be honest. The expression "good faith", in our opinion, has relevance to the frame of mind of the person at the relevant time when he furnished voluntarily the return making the disclosure of his net wealth. In a given case, in deciding the question of "good faith", what is relevant to keep in consideration is the intention of honesty and absence of bad faith or mala fides. Where the conduct of an assessee is free from contumacy, it cannot be said that he had not acted honestly and bona fide. In a case where the disclosure has been made negligently, it may still be considered as having been made in "good faith" if, in fact, it was made honestly. A mistake committed unintentionally in making a full and true disclosure by oversight or negligence without anything more, would not render the disclosure outside the purview of "good faith". The crux of the matter is absence of bad faith or mala fides. In other words, the essence of "good faith" is honesty. It precludes pretence or lack of fairness and uprightness. In a given case, if there is nothing to show that a person has consciously or knowingly furnished wrong particulars of his net wealth or has omitted to include all the items of his taxable wealth, then he must be taken to have complied with the requirements of "good faith" spoken of in Section 18B(1) of the Act. 8. In Brijendra Singh v. State of U.P., AIR 1981 SC 636 , the Supreme Court has pointed out that although the meaning of the words "good faith" may vary in the context of different statutes, subjects and situations, honest intent free from taint or fraud or fraudulent design is a constant element of its connotation. Thus, the mere fact that what has been disclosed by an assessee has not been accepted or something else has been added would not straightaway deprive the assessee in every case of the relief contemplated under Section 18B(1) unless it has been found as a fact that the assessee had acted dishonestly. Thus, the mere fact that what has been disclosed by an assessee has not been accepted or something else has been added would not straightaway deprive the assessee in every case of the relief contemplated under Section 18B(1) unless it has been found as a fact that the assessee had acted dishonestly. The case set up by the petitioner is that because of an unintentional mistake, a small portion of his taxable wealth was left out to be shown in the return, but nevertheless, the disclosure was honest and in "good faith". For the respondents, no counter-affidavit has been filed controverting these assertions. The Commissioner, in his order, has not gone into this question, as he has chosen to rest his decision on the question of "good faith" by saying that it was absent or that the disclosure of net wealth could not be treated as full and complete as an item of Rs. 5,460 was added to the wealth disclosed in the return. This, by itself, in our opinion, was not sufficient to refuse the relief which the assessee had asked for. The Commissioner ought to have called his attention to matters which he was bound to consider in law. It is no doubt true that the powers conferred on the Commissioner are discretionary but, at the same time, it has to be kept in mind that the provisions contained in Section 18B are intended for the benefit of the assessee. The Commissioner cannot refuse to grant the necessary relief arbitrarily or by refusing to take into consideration the material factors. The Commissioner of Wealth-tax, the first respondent, was required to decide the matter objectively by taking into account the question whether the omission to include a part of the wealth which was ultimately brought to tax was not bona fide and an honest act. It was not sufficient to reject the application only on the ground that since an addition had been made to the disclosed wealth, the disclosure could not be called full and complete or "in good faith". In our opinion, the Commissioner has not dealt with the matter in the right perspective. In this view of the matter, we are unable to sustain the impugned order. The matter requires fresh consideration by the Commissioner of Wealth-tax. In our opinion, the Commissioner has not dealt with the matter in the right perspective. In this view of the matter, we are unable to sustain the impugned order. The matter requires fresh consideration by the Commissioner of Wealth-tax. We do not think it necessary to address ourselves to the submission of the petitioners based on the Explanation attached to Sub-section (1) of Section 18B of the Act. The petitioners shall be at liberty to raise this plea before the Commissioner of Wealth-tax himself in the remand proceedings. 9. In view of the above, we quash the impugned order dated December 21, 1979, to the extent it concerns the assessment year 1968-69. We also direct the Commissioner of Income-tax (Wealth-tax), Meerut, the first respondent, to reconsider the application for waiver/reduction for the assessment year 1968-69 and to pass a fresh order in the light of the observations made above and in accordance with law. 10. In the result, the petition succeeds in part. The petitioners will be entitled to their costs which we assess at Rs. 300.