1. Among others, the petitioner is an assessee under the W.T. Act, 1957 (Central Act No. 27/57) (hereinafter referred to as 'the Act').
2. For the assessment years 1971-72, 1974-75 and 1976-77, the petitioner filed her returns before the second WTO Hubli (hereinafter referred to as 'the WTO'), beyond the period provided by the Act and on an examination of them, the WTO completed the assessment and notices of demand were also issued. Some time thereafter the WTO initiated proceedings for imposition of penalty for filing delayed returns against the petitioner and imposed a penalty of Rs. 25,454 against her for the aforesaid three years.
3. On April 6, 1978, the petitioner filed an application before the Commissioner of Wealth-tax, Karnataka, Bangalore (hereinafter referred to as the 'Commissioner') under s. 18B of the Act praying for waiver of the penalty imposed by the WTO (Ex. C). On August 18, 1978, the Commissioner has rejected the said application made by the petitioner (Ex. E), the validity of which is challenged by her in this petition under art. 226 of the Constitution.
4. Sri. K. S. Ramabhadran, learned counsel for the petitioner, contends that the Commissioner has rejected the application made by the petitioner on irrelevant consideration and had not at all exercised the judicial discretion vested in him by s. 18B of the Act.
5. Sri K. Srinivasan, learned counsel for the Revenue, sought to justify the impugned order.
6. In his brief order the Commissioner has rejected the application made by the petitioner on the sole ground that there was delay in filing the returns, which was not at all in dispute.
7. An application under s. 18B of the Act for waiver or reductions in penalty imposed can be made notwithstanding the fact that there was delay in filing the returns. Section 18B of the Act does not place an embargo on the Commissioner not to consider an application for reduction or waiver, if the assessee had not filed his return within the prescribed time under the Act. An application under s. 18B of the Act is maintainable notwithstanding the fact that there has been delay in filing the returns . The delay in filing the returns is not and cannot be a ground for not considering the application on merits.
8. An examination of the impugned order discloses that the Commissioner has virtually failed to exercise the judicial discretion vested in him by law by taking irrelevant considerations and not taking relevant considerations. In this view, the impugned order is liable to be quashed.
9. As the Commissioner has not considered the application and disposed of the same in conformity with law, there is no alternative for this court except to direct him to re-examine the same and dispose it of in accordance with law.
10. In the light of the above discussion, I quash the impugned order and direct the Commissioner to restore the application made by the petitioner to its original file and dispose of the same in accordance with law and the observation made in this order.
11. Rule issued is made absolute. But, in the circumstances of the case, I direct the parties to bear their own costs.