Waiver of penalty under wealth-tax law cannot be rejected only for delayed return filing; discretion must be exercised on merits.

An application for waiver or reduction of penalty under section 18B of the Wealth-tax Act was maintainable despite delayed filing of returns, because late filing did not by itself bar consideration on merits. The Commissioner was required to exercise the statutory discretion on relevant considerations, but he rejected the request solely on the admitted delay and failed to address the merits. The rejection was therefore unsustainable and was quashed, with a direction to restore the application and decide it afresh in accordance with law.

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Issues: Whether an application for waiver or reduction of penalty under section 18B of the Wealth-tax Act, 1957 was maintainable despite delayed filing of returns, and whether the Commissioner lawfully exercised the discretion vested in him while rejecting the application.

Analysis: Section 18B does not bar consideration of an application merely because the assessee filed returns beyond time. Delay in filing the returns is not a ground to refuse examination of the request on merits. The impugned order showed that the Commissioner rejected the application solely on the admitted delay and did not consider the matter on relevant considerations, thereby failing to exercise the discretion vested in him according to law.

Conclusion: The rejection order was unsustainable and was quashed. The Commissioner was directed to restore the application and dispose it of afresh in accordance with law.

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