Reasonable opportunity before penalty bars natural justice challenge to late-filing wealth-tax penalties.

Where penalty proceedings for late filing of wealth-tax returns were preceded by a hearing and a reasonable opportunity to explain the delay, cancellation of the penalty on the ground of breach of natural justice was not justified. The assessee had been heard by the appellate authority and by the Wealth-tax Officer, and the explanation for delay was not accepted. On that basis, the Tribunal's view that the penalty orders lacked reasons and offended natural justice was rejected, and the penalties were sustained.

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Issues: Whether the Appellate Tribunal was right in cancelling the penalties imposed under section 18(1)(a) of the Wealth-tax Act, 1957, despite the assessee having been heard by the appellate authority and having been given an opportunity to explain the delay in filing the returns.

Analysis: The returns for the assessment years in question were filed long after the due dates, and penalty proceedings were initiated for belated filing. The assessee's explanation was not accepted by the appellate authority, which had heard him on the question of delay. The record also showed that, when the matter was fixed before the Wealth-tax Officer, an adjournment was sought and refused, and the assessee's counsel was heard. In these circumstances, the Tribunal's view that the orders lacked reasons and offended natural justice was not accepted, as the assessee had been afforded a reasonable opportunity of being heard before the penalties were imposed.

Conclusion: The reference was answered in the negative, holding that the Tribunal was not right in cancelling the penalties; the decision was in favour of the Revenue and against the assessee.

Final Conclusion: The penalties for late filing were sustained, and the Tribunal's cancellation of those penalties was set aside in principle by the answer returned on the reference.

Ratio Decidendi: Where the assessee has been given a reasonable opportunity to explain the delay and is heard before the imposition of penalty, cancellation of the penalty on the ground of breach of natural justice is not justified.

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