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TMI Blog2004 (11) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of section 18B(5) of the Wealth-tax Act?" - We answer the question referred to us in the affirmative, i.e., in favour of the assessee and against the Revenue. - - - - - Dated:- 10-11-2004 - Judge(s) : R. K. AGRAWAL., PRAKASH KRISHNA. JUDGMENT The judgment of the court was delivered by R.K. Agrawal J.- The Income-tax Appellate Tribunal, Allahabad, has referred the following question of law under section 27(1) of the Wealth-tax Act, 1957, for opinion to this court: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the Appellate Assistant Commissioner of Income-tax was competent to decide the appeal on the merits, and consequently in giving a findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed separate appeals before the Income-tax Appellate Tribunal. The Tribunal had dismissed the appeals filed by the Revenue. Before the Tribunal, a plea was raised that the Appellate Assistant Commissioner had no right to entertain the appeal as the order of penalty has got merged with the order passed by the Commissioner of Wealth-tax under section 18B of the Act. This argument had been repelled by the Tribunal with the following observations: "In our opinion the fields of the operation of the two sections 18(1)(a) and 18B are different. However, there are several High Courts (as mentioned above while dealing with the arguments of the representative of the assessee) which have held that the right of appeal of the assessee is not disturbed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, the appeal was maintainable. In support of his aforesaid submissions, he has relied upon the following decisions: (i) CWT v. B. Kempanna [1980] 126 ITR 825 (Karn); (ii) CWT v. Smt. Gulab Bai Mittal [1983] 141 ITR 755 (MP); and (iii) CWT v. Lt. Col. Mirza Mahmood Ali Baig [1985] 152 ITR 740 (AP). Having heard learned counsel for the parties, we find that under section 18B of the Act, the Commissioner of Wealth-tax has been empowered to reduce or waive the penalty in certain cases. This power can be exercised only in a case where penalty has been imposed. He is not to go into the merits of imposition of penalty. He has only to see as to whether the assessee has voluntarily and in good faith made full and true disclosure of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he power could be exercised by the Commissioner notwithstanding the default and there being no reasonable cause for the failure to furnish the return within the time prescribed. The question of existence of reasonable cause is not within the ambit of section 18(2A); that inheres in the Wealth-tax Officer. The opening words of the section also indicate that it is only notwithstanding anything contained in clause (i) or clauses (iii) of sub-section (1) and not notwithstanding any other provision in the Act that the Commissioner could act. The provision does not override or obliterate the jurisdiction conferred on the other authorities under the Act. Under section 18(2B), what is made final is the order made under section 18(2A), i.e., in rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsequently, the right of appeal available to the assessee against the order of the Wealth-tax Officer imposing penalty under section 18(1)(a) (even subject to the reduction as directed by the Commissioner) is not lost. Therefore, when an order has been passed under section 18(2A) by the Commissioner, the order of the Wealth-tax Officer imposing penalty under section 18(1)(a) does not get effaced and an appeal could be filed against it to the appellate authorities. In the case of Smt. Gulab Bai Mittal [1983] 141 ITR 755, the Madhya Pradesh High Court has held as follows: "The provisions of section 18B of the Wealth-tax Act, 1957, which confer power on the Commissioner to reduce the amount of penalty imposed on an assessee under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Calcutta High Court has dissented from the decision of the Madras High Court in the case of M.K.S. Vanavarayar [1980] 122 ITR 184 and of the Karnataka High Court in the case of B. Kempanna [1980] 126 ITR 825 and has held that in order to merit a waiver or reduction in penalty it implies that penalty must be imposable. Therefore, the moment the assessee chooses to go to the Commissioner for a waiver of penalty, in our opinion, he admits the position that conditions under clause (a), clause (b) and clause (c) of sub-section (1) of section 18 have been fulfilled. If on that basis any order is passed, then he cannot feel aggrieved by such an order on the quantum of the waiver. Normally, an appeal would lie questioning the imposition on the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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