Limitation under the Wealth-tax Act bars assessments made after prescribed cut-off dates, voiding related penalties.

Assessments made after the statutory outer period prescribed by the Wealth-tax Act are invalid; returns filed beyond those limitation dates cannot support valid assessments, and consequential penalties predicated on time-barred assessments lack legal basis. Applying the statutory limitation framework to the assessment years in question, the assessments were time-barred and therefore invalid, and the penalties levied solely on those assessments cannot be sustained in law. Outcome: the assessments for the specified years are invalidated and associated penalties fail for want of a lawful foundation.

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Issues: (i) Whether the wealth-tax assessments for the assessment years 1967-68, 1968-69, 1970-71 and 1971-72 were time-barred and whether penalties levied on the basis of those assessments were legally sustainable.

Analysis: The statutory time limits introduced by section 17A of the Wealth-tax Act, 1957 prescribe the outer period for completion of assessments; assessments made after the expiry of those limitation periods are invalid. For the years in question, the applicable limitation dates meant that assessments could not be validly made beyond the statutory cut-off dates, and returns filed after those dates cannot serve as the basis for valid assessments. Where an assessment is time-barred and therefore invalid, any penalty predicated upon such an assessment lacks a lawful basis.

Conclusion: Issue (i) is answered in favour of the assessee; the assessments for the specified years were time-barred and the penalties levied on the basis of those assessments cannot be sustained.

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