B.L. Hansaria, J.
1. The petitioner is a wealth-tax assessee. He was late in filing returns for the assessment years 1964-65 to 1969-70. The respondent No. 2, therefore, issued show-cause notice on the petitioner as to why penalty should not be imposed on him under Section 18(1)(a) of the W.T. Act, 1957 (for short 'the Act'). The petitioner thereupon approached the Commissioner of Wealth-tax (respondent No. 1) stating that as the petitioner had voluntarily and in good faith made a full disclosure of his net wealth, the penalty may be waived under the power conferred on the former by Section 18(2A) of the Act. The learned Commissioner went through the facts of the case and stated in his impugned order that all the conditions laid down in Section 18(2A) of the Act were satisfied. He thereafter stated as below:
'There has been delay in filing the return and keeping in view that the assessee himself has voluntarily disclosed the fact of his owning taxable wealth in these years. I am of the view that the interest of justice would be met if the penalty is restricted to 25% of the normal penalty imposable under Section 18(1)(a) of the Wealth-tax Act, 1957...'
2. He, therefore, directed such a reduction.
3. The grievance that has been made on behalf of the petitioner in these applications which relate to the aforesaid six assessment years is that Section 18(2A) conferred on the learned Commissioner power to even totally
waive the amount of penalty imposed or imposable under law, but the same has been refused without assigning any reason. The penalty becomes imposable only when there has been a delay in the filing of the return. So the fact of delay in the filing of the return cannot itself stand in the way of the assessee to. claim a full waiver of the penalty. In the statute no guidance has been given as to when the penalty should be reduced, and if so to what extent, and when the same should be waived. But there can be no denial that the right of waiver having been given to the Commissioner, the same has to be exercised in appropriate cases. It is settled law by now that when a power is conferred which is Coupled with a duty it has to be exercised when called upon to do so. Reference may be made to the cited case of Julius v. Bishop of Oxford  5 App Cas 214, wherein Lord Blackburn stated as below (p. 241):
'.....if the object for which the power is conferred is for the purpose of enforcing a right, there may be a duty cast on the donee of the power, to exercise it for the benefit of those who have that right, when required on their behalf.'
4. In the present case, no reason at all has been attributed by the learned Commissioner in having ordered a reduction of the penalty to 25%. The circumstances under which penalty can be totally waived cannot be exhaustively enumerated, but some of the points which may have to be borne in mind in this context are : (1) gravity of the offence ; (2) loss to the revenue caused by the assessee by not filing the return in time ; (3) the extent of tax withheld ; and (4) the period of delay. Mention may be made about Sankara Apaya Swami v. WTO : 103ITR649(KAR) in this connection.
5. As, in the present case, the learned Commissioner has ordered to reduce the penalty to 25% without giving any reason, the same, cannot be sustained. No doubt the section in terms dues not require the recording of reasons, but as the action taken under the provision is not purely administrative in character, being not based on policy, the thinking of the authority has to find a place in the order. This would provide a check on the arbitrary use of power as well. Any order passed under this section is also of some moment for the assessee which is yet another reason to pass a reasoned order, so that if the assesses be aggrieved by it, he may ventilate his grievance before the appropriate forum.
6. Accordingly, the impugned orders are set aside and the learned Commissioner is directed to apply his mind afresh to the facts of the case and to arrive at such conclusion relating to the prayer for a waiver of penalty, as he may deem lawful.
7. The petitions stand allowed as aforesaid.