Law:

Section:

Section 18(2A) [omitted by the taxation laws (amendment) act, 1975, with effect from 1-4-1976 and since incorporated in section 18B] of the wealth-tax act, 1957-Penalty-Commissioner's power to reduce or waive-WTO imposed penalty on assessee under section 18(1)(A) after rejecting its explanation for delay-Commissioner acting under section 18(2A) considered assessee's explanation bona fide but did not waive penalty though he reduced it-No reasons given in commissioner's order for his decision-Whether commissioner's order sustainable-Held, on facts, no [matter remanded for fresh disposal] Facts For late submission of the returns for the years 1966-67 to 1969-70, the WTO imposed penalty on the assessee under section 18(1)(a), after rejecting its explanation. On the assessee's application under section 18(2A) for waiver of the penalty, the Commissioner held that though the explanation offered by the assessee was bonafide, yet it did not constitute conclusive defence and reasonable cause under section 18(1)(a) for non-levy of penalty. Consequently, the Commissioner did not waive the penalty though he reduced its quantum to 25 per cent of that originally imposed. On writ petition: Held Apparently, the Commissioner had overlooked the respective scope and ambit of sections 18(1)(a) and 18(2A). The question of reasonable cause crops up under section 18(1)(a ) and if there is any reasonable cause for delay, there is no occasion to impose penalty and the question of J invoking section 18(2A) never arises. The power to waive penalty under section 18(2A) is quite distinct and different from the power to 'impose penalty' contemplated under section 18(1). Some of the illustrative but not exhaustive factors to be kept in mind while considering an application under section 18(2A) are: (i ) the gravity of default, (ii) whether the assessee has defaulted to make any wrongful gain for himself or to cause wrongful loss to the revenue ; and (iii ) the nature of the conduct and behaviour of the assessee during and before the proceedings. Since, in the instant case, none of the relevant factors required to be considered by the Commissioner was taken note of, but he considered the…

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