1. The petitioner in these two writ petitions was an assessee under the Wealth-tax Act, 1957 (hereinafter referred to as 'the Act'), during the assessment years 1969-70 and 1970-71. He filed the returns pertaining to those two assessment years beyond the prescribed time. The Wealth-tax Officer, being of the opinion that there was no reasonable cause for filing the returns beyond time, made an order under the provisions of section 18(1)(a) of the Act calling upon the petitioner to pay penalties as provided by law. Aggrieved by the orders passed by the Wealth-tax Officer levying the penalties, the petitioner approached the Commissioner of Wealth-tax with applications under sub-section (2A) of section 18 of the Act, requesting him to exercise his discretion and to reduce or waive the amount of penalties imposed on him. The Commissioner rejected both the applications. While doing so, he observed as follows :
'From 1969-70 onwards there was no reason why he should have delayed filing of returns when he was conscious of the provisions of law leading to wealth-tax liability. This in my opinion amounts to a conscious disregard of the law and the delay in filing the return cannot be explained and no good faith is established. In his petition the assessee has stated that he thought his wealth would not exceed the taxable minimum and hence he did not file the return of wealth in time, which means he examined the liability and kept quiet and after a delay of 39 months for 1969-70 and 27 months for 1970-71, the returns were filed. Under these circumstances, though the returns are voluntary they are not in good faith. Hence, the assessee's petition is rejected.'
2. The portion of the order of the Commissioner extracted above shows that the Commissioner while he disposed of the two petitions before him only considered whether the petitioner had reasonable cause for not filing the returns in time. Such investigation would be germane to the determination of the liability under section 18(1)(a), because on reasonable cause being shown for filing the returns beyond time, the assessee would be entitled to be exonerated from the liability to pay the penalties. This is a matter which falls within the jurisdiction of the Wealth-tax Officer, and if he commits an error in exercising his jurisdiction, it would be open to the Commissioner to correct it in the exercise of powers of revision under the Wealth-tax Act. In these cases, the petitioner requested the Commissioner to exercise his power under section 18(2A) of the Act which empowered him to reduce or waive the penalty imposable under section 18(1) of the Act, notwithstanding the provisions contained in section 18(1) of the Act. In cases coming under section 18(2A) of the Act, the considerations which should weigh with the Commissioner necessarily have to be different from the considerations which would weigh while determining whether the assessee has reasonable cause for not filing the returns in time or not. It is not the case of the authorities that the assessee has failed to disclose all his wealth which is liable to payment of wealth-tax. The penalties levied for the year 1969-70 is Rs. 6,318 and for the year 1970-71 is Rs. 7,560, whereas the tax payable was Rs. 162 and Rs. 280 respectively.
3. It is no doubt true that in order to ensure due observance of law, section 18(1)(a) provides for the levy of a penalty of the order referred to above. At the same time, section 18(2A) confers discretionary power on the Commissioner of Wealth-tax to reduce or waive the penalty, having regard to all the circumstances of the case. Such discretionary power has to be exercised in a reasonable way.
4. While determining whether the assessee is entitled to any relief under section 18(2A) the Commissioner of Wealth-tax, no doubt, has to satisfy himself that the pre-conditions mentioned in clauses (a), (b) and (c) of section 18(2A) are fulfilled by the assessee. We are concerned in these cases with the interpretation of the words 'has ... voluntarily and in good faith, made full disclosure of his net wealth ...' appearing in clause (a) of section 18(2A) of the Act. The Commissioner has held that 'though the returns are voluntary they are not in good faith' on the ground that the assessee had not filed the returns in time though he was conscious of the taxability of his wealth. I am of the view that the Commissioner has wrongly applied the provisions of the Act. The words appearing in clause (a) which are extracted above do not relate to the cause for the delay in filing the return. The question whether there was reasonable cause for filing the return beyond time arises for consideration under section 18(1)(a) itself and if the authority concerned is satisfied that there was reasonable cause for the delay then there would be no occasion to levy penalty and for invoking section 18(2A). It has, therefore, to be held that the words in question relate to the return which is filed beyond time without reasonable cause. If in that return the assessee has 'voluntarily and in good faith, made full disclosure of his net wealth' the condition mentioned in clause (a) stands satisfied. The expression 'voluntarily' means 'without compulsion' and 'good faith' means 'with due care and caution'. Hence, if the return filed by the assessee does not show that he has deliberately furnished wrong particulars about his wealth or deliberately omitted to include all the items of taxable wealth then he should be considered as having satisfied the above condition. In these cases it is not suggested by the revenue that there has been any concealment of taxable wealth in the returns filed by the petitioner. On the facts and in the circumstances of these cases, I hold that the petitioner has satisfied the condition in clause (a) of section 18(2A). Hence, the orders passed by the Commissioner rejecting the applications of the petitioner on the sole ground that he had not in good faith made full disclosure of his net wealth, have to be set aside. They are accordingly set aside.
5. It is needless to mention that the Commissioner while exercising his discretion under section 18(2A) has to bear in mind several factors such as the gravity of the default, the loss occasioned to the revenue by the assessee not filing the return in time, and the extent of tax withheld. These factors are only illustrative but not exhaustive. Just like in criminal cases a judge while imposing a sentence on the accused who is found guilty of an offence takes into consideration several factors apart from the fact that he has committed the offence in question, the Commissioner should take into consideration all other relevant factors while reducing or waiving the penalty imposed or imposable under section 18(1)(a) of the Act.
6. The cases are remanded to the Commissioner of Wealth-tax to dispose of them in accordance with law.
7. No costs.