R.K.Agrawal, J. - (1.) The Tribunal, Allahabad, has referred the following question of law under Section 27(1) of the WT Act, 1957 (hereinafter referred to as "the Act"), for opinion to this Court : "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the AAC was competent to decide the appeal on merits, and consequently in giving a finding that there was reasonable cause for the delay in filing the WT return, ignoring the vital fact that the CWT had passed an order under the provisions of Section 18B of the WT Act, declining to waive the penalty, and the WTO's earlier order levying penalty got merged with the CWT's order and became final in view of specific provisions of Section 18B(5) of the WT Act ?"
(2.) Briefly stated, the facts giving rise to the present petition are as follows: The reference relates to the asst. yrs. 1974-75 to 1976-77. The respondent assessee is an individual He filed his WT returns for the assessment years in question after the due date. Penalty proceeding under Section 18(l)(a) of the Act was initiated and the WTO imposed penalty for late filing of return. The respondent filed an application under Section 18B of the Act before the CWT, Kanpur, seeking waiver/reduction of the amount of penalty in respect of all the three years, which was dismissed by the CWT, vide order dt. 29th June, 1981. Even when the petition for waiver under Section 18B of the Act was pending before the CWT, the respondent had preferred separate appeals against the penalty order before the AAC. The AAC had partly allowed the appeals. The Revenue feeling aggrieved, preferred separate appeals before the Tribunal. The Tribunal had dismissed the appeal filed by the Revenue. Before the Tribunal, a plea was raised that the AAC had no right to entertain the appeal as the order of penalty has got merged with the order passed by the CWT 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 on account of filing of waiver petition by the assessee or on account of passing an order under Section 18B by the CIT (sjc-CWT). We are of the opinion that the AAC was correct in holding that he was competent to decide the appeals on merits. The AAC was further justified in holding that the delay till the date of filing of IT returns was due to a reasonable cause."
(3.) We have heard Sri A.N. Mahajan, the learned standing counsel for the Revenue, and Sri Vikram Gulati, learned counsel appearing for the respondent.;