Balasubrahmanyan, J.:— The petitioner is an old wealth-tax assessee. For the assessment years 1971-72, 1972-73 and 1973-74, the assessee did not file his wealth-tax returns under s. 14(1) of the W.T Act, 1957. However, no notices were issued by the WTO under s. 14(2) of the Act calling upon the assessee to file returns of his net wealth for these three assessment years. Short of filing returns, the assessee, however, placed all the materials requisite for his assessment for these three years. It may be observed that since the assessee was assessed to wealth-tax for the earlier years, those materials were also before the WTO. On the basis of all these considerations, the assessments were completed.

2. Parallel proceedings for penalty were initiated by the WTO under s. 18(1) of the Act for non-filing of the wealth-tax returns u/s. 14(1). During the pendency of the proceedings, the petitioner approached the CWT under s. 18(2A) of the Act with a request that the penalties may be waived. It was represented before the Commissioner that the assessee had fulfilled the requirements of s. 18(2A) and he was entitled to indulgence at the hands of the Commissioner. The Commissioner, however, turned down the application. This writ petition has been filed by the assessee to quash the Commissioner's order and to direct him to consider the petitioner's application under s. 18(2A) on the merits and grant the waiver of penalties prayed for. The order of the Commissioner shows that the one and only reason which weighed with him was that the assessee did not file the returns under s. 14(1) for the assessment years in question. The Commissioner remarked that since the assessee was an “old” wealth-tax assessee on the file of the WTO, the assessee ought properly to have either filed the returns in time or at least applied to the WTO for extension of time for filing the returns. Since the assessee did not follow either course, the Commissioner felt that he could not exercise his discretion for waiver of the penalty. According to the Commissioner the assessee had not fulfilled the conditions laid down under s. 18(2A).

3. Mr. Janarthana Raja, learned counsel for the assessee, submitted that the order of the CWT is based on an error apparent from the record. It also amounted to a failure on the part of the Commissioner to exercise a jurisdiction vested in him under the law.

4. Under the scheme of the W.T Act, where an assessee fails, without reasonable cause, to furnish his return of net wealth, or fails, without reasonable cause, to file the return within the time limited, he is liable for penalty, and, in certain cases, for a minimum penalty to be levied by the WTO under s. 18(1) of the Act. Parliament apparently believed that the CWT must be given the discretion, in appropriate cases, to waive or reduce the penalty, even in instances where, on the facts, the assessee would otherwise be rendered liable for penalty in non-filing or for delayed filing of the returns. A similar power was also thought necessary to be conferred on the Commissioner in the case of penalties leviable for concealment of net wealth. Parliament, accordingly, introduced sub-s. (2A) in s. 18, investing the Commissioner with what may be called “reserve powers” for waiver or reduction of penalties which would otherwise be leviable under s. 18(1) for default in the matter of filing of returns, and under s. 18(3) for concealment of taxable net wealth.

5. The power of the Commissioner in regard to waiver or reduction of penalty for default in the matter of filing the returns is set out in s. 18(1)(a) of the Act. According to this provision, the Commissioner may, in his discretion, reduce or waive the penalty imposable on an assessee for failure to file a return without reasonable cause, or for failure to furnish a return without reasonable cause under s. 14(1) if the Commissioner was satisfied that the assessee had voluntarily and in good faith made a full disclosure of his net wealth prior to the notice to him under s. 14(2) of the Act.

6. In this case the submission of learned counsel for the assessee was that there was no notice issued by the WTO under s. 14(2) at all for any of the assessment years. But the assessee himself volunteered to furnish all the requisite details necessary for the assessment of his net wealth for these years and this disclosure he made was made in good faith. It was, accordingly, urged that all the conditions stipulated for the exercise of the Commissioner's discretion under s. 18(2A) had been fulfilled in the present case and the imputation made by the Commissioner to the contrary is without any basis.

7. Mr. Jayaraman, learned standing counsel for the Department, made a submission on the basis of a construction which he invited us to place on s. 18(2A). He said that under s. 18(2A) an assessee would be penalised for a default in the filing of the return where the default is without reasonable cause. Section 18(2A) would come to the aid of such an assessee even in cases where there is no reasonable cause for the default, provided that even before a notice under s. 14(2) goes to an assessee he makes a full disclosure in good faith of particulars of taxable net wealth. According to learned counsel, the Commissioner would have jurisdiction to waive or reduce the penalty if the assessee's conduct is one of full disclosure in good faith. But according to the learned counsel, “good faith” must have something to do with the non-filing of the return or with the delayed filing of the return. Where the assessee is not in a position to urge any explanation for the default in the matter of filing the return by reference to good faith, the Commissioner would be well within his power to decline to interfere under s. 18(2A) of the Act. In the present case, the Commissioner in his order made a reference to the aspect of good faith when he referred to the fact that the assessee was an old assessee and he was quite aware of his statutory obligation in the matter of filing the return under the W.T Act; The Commissioner also referred to the fact that the assessee had not filed any application for extension of the time for filing the return. In these circumstances, according to the learned counsel, the Commissioner had good reason for not regarding the default of the assessee as having been made under good faith.

8. Learned standing counsel, however, conceded that the assessee had in point of fact filed a return, although belatedly, which return had been fully accepted and acted upon by the WTO in making the assessment. Even so, according to learned counsel, this part of the conduct of the assessee would only go to the extent of rendering his conduct for the disclosure. That, however, would not come to the aid of the assessee in that aspect of the provision which requires “good faith” in the assessee.

9. The submissions of the department's learned counsel are quite attractive, but we do not agree with them. The expression used by s. 18(2A) lays down more or less a condition for the intervention of the Commissioner when it speaks of the assessee's, disclosure as having to be “full disclosure in good faith”. What the phrase means is that an assessee who has committed a default in filing the return under s. 14(1) of the Act might nevertheless come out with a full disclosure in good faith thereafter. This phrase does not require the assessee to file a return subsequent to the time-limit under s. 14(1) as a condition precedent for the application for waiver or reduction of penalty under s. 18(2A). In this case, as the learned standing counsel had stated, the assessee had made a full disclosure in the sense that he had filed a return, although belatedly. The only thing which could be put against the assessee is that he did not obtain the leave of the WTO to file the return beyond the expiry of the statutory time-limit fixed under s. 14(1). We do not think, however, that the omission on the part of the assessee to make an application for extension of time for furnishing the return can serve as a relevant consideration for the purpose of s. 18(2A). An omission of this kind might possibly have some bearing in a proceeding under s. 18(1A), where the enquiry is whether the default in the filing of the return or the delayed submission of the return is with or without reasonable cause. That test, however, is definitely absent in s. 18(2A). We are, therefore, not satisfied that the mere fact that the assessee had not applied for extension of time can stand in the way of the Commissioner exercising his discretion under s. 18(2A) of the Act.

10. We also do not accept the learned standing counsel's interpretation of the requirement as to “voluntarily and in good faith” as having a bearing on the omission on the part of the assessee to file the return. The good faith spoken of by s. 18(2A) has nothing whatever to do with the frame of mind of the assessee at the time when the return ought to have been filed. On the terms of s. 18(2A) the good faith has reference to the full disclosure, subsequent to the expiry of the time-limit under s. 14(1).

11. This only leaves for consideration the assessee's conduct in not obtaining extension of time as evidence of lack of good faith. We have earlier stated that an assessee who follows the procedure of obtaining or applying for extension of time, need not have to move the Commissioner under s. 18(2A), for, if he properly moves the WTO for extension of time, there can be no question at all of his being, proceeded against for levy of penalty even under s. 18(1)(a) of the Act. We are, therefore, satisfied that the mere fact that the assessee had not applied for extension of time for filing the return beyond the time-limit fixed under s. 14(1) cannot be regarded as conduct wanting in good faith.

12. The absence of neither the default committed in the filing of the return under s. 18(1)(a), nor the omission to obtain extension of time, has any relevance for the limited purpose of invoking the jurisdiction of the Commissioner under s. 18(2A).

13. The one and the only criticism of the conduct of the assessee by the Commissioner, namely, that he was an old assessee who did not file the return and did hot also ask for extension of time for filing the return is thus irrelevant for the purpose of s. 18(2A). The refusal by the Commissioner to exercise his discretion under the provision must be regarded as based on irrelevant consideration. It must also be described as failure on his part to exercise a jurisdiction vested in him:

We have already referred to the fact that the assessments which were ultimately processed in the assessee's case were based in toto on the returns filed by the assessee. This shows that the assessee had extended something more than co-operation to the Department; he really furnished a return which, was absblutely correct and true. It is also found that there is no dispute before us that the other condition set but in s. 18(2A) to be exercised by the Commissioner's discretion has also been fulfilled by the assessee when he had paid in full the tax for the assessments concerned.

14. In these circumstances we have no doubt that the assessee's application under s. 18(2A) is quite competent. We have also no doubt, whatever that once the Commissioner accepts the assessee's application as entertainable, he would bring to bear a proper approach and would exercise his discretion in a proper way. We have to interfere in a writ petition to bring about this result, because there is no remedy to a person aggrieved against any particular line of action taken by the Commissioner, since under s. 18(2A) the decision of the Commissioner is final. This statutory finality, however, does not affect our jurisdiction under art. 226 of the Constitution. The prescription of the statute that the decision of the Commissioner is final only acts as a proper caution in every case that the Commissioner should exercise his discretion by bringing to bear a positive attitude, and in accordance with law. In this case, we have held that the grounds on which the Commissioner had declined to exercise his jurisdiction are not proper grounds at all: In that sense it must also be said that there has been no exercise of discretion at all by him. This provides an additional ground for allowing this writ petition. For all the above reasons, the writ petition is allowed and the rule nisi is made absolute. The order of the Commissioner is quashed and he is directed to entertain the petitioner's application under s. 18(2A) and give a disposal on merits.

15. It is brought to our notice that since there is no order of this court staying the hands of the WTO during the pendency of this writ petition, that authority felt free to proceed with the penalty proceedings and had passed orders levying penalty against the petitioner for all the three assessment years. It is explained by the learned standing counsel that while the Commissioner declined to interfere, the WTO had to go ahead with the penalty, in view of the period of limitation prescribed under the Act drawing near, especially in the absence of any orders of stay from this court. It is quite clear, however, that the orders of penalty passed by the WTO would become ineffective in the event of the Commissioner exercising his discretion to waive or reduce the penalty under s. 18(2A) pursuant to our directions in the writ petition. In the circumstances of the case, there will be no order as to costs in this petition.