TMI Blog1991 (3) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... see. So, the Wealth-tax Officer imposed penalty at the rate of 1/2% of the net wealth for each completed month of default. On March 25, 1985, the assessee filed separate petitions under section 18B of the Act for reduction/waiver of the penalties imposed. On the next date i.e. March 26, 1985, she filed separate appeals against the penalty orders before the Appellate Assistant Commissioner. By an order dated October 18, 1985, the Commissioner of Income-tax rejected the petitions under section 18B for all these years. On January 10, 1986, the Commissioner of Income-tax rectified the said order under section 35 of the Act and reduced the penalty under section 18(1)(a) to the extent of 50% of what is leviable or levied for each of these assessment years. The Appellate Assistant Commissioner heard the appeals on September 2, 1986 and August 27, 1987, and disposed of the appeals for the assessment years 1967-68, 1968-69, 1969-70 and 1974-75 by an order dated April 30, 1987, and the appeals relating to the assessment years 1970-71 to 1973-74 by an order dated August 31, 1987. She cancelled the penalty for the assessment year 1974-75, but upheld the penalty for the remaining assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs by 50%. Mr. Bhattacharjee has submitted that an appeal lies against the order of the Wealth-tax Officer inasmuch as the opening words of section 18B are "notwithstanding anything contained in this Act". According to him, the Commissioner of Wealth-tax could only consider the question of reduction or, waiver of penalty but whether penalty was at all imposable or not and whether there was any reasonable ground for delay in filing the return or not were not and could not have been the issue before the Commissioner and, accordingly, the Commissioner could only decide the question of quantum and not as to the liability of the assessee. Whether penalty was imposable at all or not could be decided only by the appellate authority before whom the appeals were pending and the appellate authority could decide the issue notwithstanding the making of an application by the assessee under section 18B for reduction or waiver of penalty. He relied on several decisions ; the first decision is of the Madras High Court in CWT v. M. K. S. Vanavarayar [1980] 122 ITR 184. In that case also, the question arose whether an appeal lies against the order passed by the Wealth-tax Officer in pursuance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18(2A). This is because the ambit and scope of section 18(2A) is quite different and in no way affects the jurisdiction of the Wealth-tax Officer to decide about the question arising under section 18(1)(a) of the Act as to the existence or non-existence of a reasonable cause. The only effect the order of the Commissioner would have is that the minimum penalty to be levied by the Wealth-tax Officer would be in accordance with what is determined by the Commissioner if the minimum penalty is only reduced and not waived, and if it is waived, the Wealth-tax Officer is also bound not to levy any penalty. Apart from this, there is no other effect consequent on the order of the Commissioner under section 18(2A) so far as the jurisdiction of the Wealth-tax Officer is concerned in the matter of imposition of penalty. Consequently, 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived or reduced and nothing more. There was no provision that once the assessee filed an application under section 18(2A) before the Commissioner he waived his other rights. With great respect, we are, however, unable to agree with this conclusion. The expression I notwithstanding' makes it quite clear, in our opinion, that only on the fulfilment of the conditions where penalty was imposable, i.e., under clause (a), (b) or (c) of sub-section (1) of section 18, that the power of the Commissioner becomes exercisable. If on that basis the Commissioner exercises his power and an order has been passed, then a person cannot be aggrieved by the exercise of that power. In that view of the matter, in view of the language used in section 18(2B) read with section 18 (sic), in our opinion, these two powers cannot co-exist in the facts and circumstances of the case. " Further, the decision of the Madras High Court in M. K. S. Vanavarayar [1980] 122 ITR 184 was also distinguished therein in the following manner (at page 240) : " Our attention was drawn to a decision of the Madras High Court in the case of CWT v. M. K. S. Vanavarayar [1980] 122 ITR 184, where the Division Bench of the Madras ..... X X X X Extracts X X X X X X X X Extracts X X X X
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