Oza, Actg. C.J.
1. This is a reference made by the Income-tax Appellate Tribunal, Jabalpur, for answering the following question :
'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that an appeal before the AAC was maintainable against the WTO's penalty order under Section 18(1)(a) of the Wealth-tax Act, 1957, irrespective of the fact that the Commissioner of Wealth-tax had dismissed the petition filed by the assessee for waiver or reduction of penalty under Section 18(2A) of the Wealth-tax Act?'
2. Facts stated in this reference are that the assessee had submitted returns for the years 1964-65 to 1971-72, on March 27, 1973, and had also submitted a petition to the Commissioner, Wealth-tax, for waiver of the penalty. The WTO imposed penalty with regard to the assessment for delay in filing the returns and the Commissioner rejected the application filed by the assessee under Section 18(2A) of the Act for waiver of the penalty. The assessee preferred appeals before the AAC who did not examine the case of the assessee on merits, but dismissed the appeals holding that as the Commissioner had rejected their petition under Section 18(2A), the appeals were not competent. Against this order of the AAC, the assessee went up in appeal, to the Appellate Tribunal which took the view that the AAC was not right in dismissing the appeals merely on the ground that as the Commissioner had rejected the application Under Section 18(2A), the appeals were not competent. The Tribunal held that the appeals to the Appellate Assistant Commissioner were competent and directed the AAC to consider the appeals on merits. After this order passed by the Appellate Tribunal, this reference has been made at the instance of the Revenue for answering the question quoted above.
3. Section 18(2A) of the W.T. Act under which the Commissioner has been conferred with jurisdiction to consider the question of waiver of penalty, is altogether on different considerations. The section reads as under :
'18. (2A) Notwithstanding anything contained in Clause (i) or Clause (iii) of Sub-section (1), the Commissioner may, in his discretion,--
(i) reduce or waive the amount of minimum penalty imposable on a person under Clause (i) of Sub-section (1) for failure, without reasonable cause, to furnish the return of net wealth which such person was required to furnish under Sub-section (1) of Section 14, or
(ii) reduce or waive the amount of minimum penalty imposable on a person under Clause (iii) of Sub-section (1),
if he is satisfied that such person-
(a) in the case referred to in Clause (i) of this sub-section has, prior to the issue of notice to him under Sub-section (2) of Section 14, voluntarily and in good faith, made full disclosure of his net wealth ; and in the case referred to in Clause (ii) of this sub-section has, prior to the detection by the Wealth-tax Officer of the concealment of particulars of assets or of the inaccuracy of particulars furnished in respect of the assets or debts in respect of which the penalty is imposable, voluntarily and in good faith, made full and true disclosure of such paticulars ;
(b) has co-operated in any enquiry relating to the assessment of the wealth represented by such assets ; and
(c) has either paid or made satisfactory arrangements for payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year.'
4. It is clear from the language of Section 18(2A) that the Commissioner has to consider on the assumption that the assessee has, without reasonable cause, Jailed to furnish the return and the assessee has become liable for penalty. The considerations for the Commissioner to waive the penalty are not as to whether there was or was not reasonable cause for late filing of the return, but, as the language of the section quoted above discloses, it is altogether on different considerations, whereas the WTO imposed the penalty as the cause shown by the assessee was not considered to be reasonable and that is the ground on which the WTO could impose penalty Under Section 18.
5. It is, therefore, clear that the considerations for imposition of penalty are different from the considerations which are provided in Section 18(2A) for the Commissioner to waive the penalty and in this view of the matter, therefore, it is clear that merely because the Commissioner has chosen not to waive the penalty Under Section 18(2A) it could not be a ground for holding that the appeals are not competent. The same view has been taken by the Division Bench of this court in Misc. Civil Case No. 430/78 (Jagdish Agarwal v. CWT : 143ITR941(MP) ), placing reliance on the decisions of the Karnataka, Madras and Delhi High Courts.
6. In our opinion, therefore, the AAC was not right in holding that the appeals are not competent. Our answer to the question, therefore, is in the affirmative. The Appellate Tribunal was justified in holding the appeals before the AAC as maintainable against the WTO's order imposing penalty Under Section 18(1)(a) of the W.T. Act. In the circumstances of the case, parties are directed to bear their own costs.