Revised wealth-tax return filed with sufficient cause defeated penalty where ancestral property was shifted to the HUF return.

Penalty under section 18(1)(a) of the Wealth-tax Act was not exigible where the original wealth-tax return had been filed on time, and the assessee later submitted a revised return after excluding ancestral property wrongly included in the individual return and showing it in the HUF return as karta. The delayed fresh return was treated as supported by sufficient cause, and the lawful exercise of the right to revise the return negatived the basis for penalty. The cancellation of penalty was therefore upheld in favour of the assessee.

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Issues: Whether penalty under section 18(1)(a) of the Wealth-tax Act, 1957 was justified for the delayed filing of the wealth-tax return when the original return had been filed in time and a revised return was later submitted after excluding ancestral property and filing it in the capacity of karta of the HUF.

Analysis: The original return had been filed within time and disclosed a larger wealth. The later return was not a case of unexplained default, but a revised return filed after the assessee realised that ancestral property had been wrongly included in his individual return and could properly be shown in the HUF return. In these circumstances, the delay in filing the fresh return was held to be supported by sufficient cause, and the exercise of the right to file a revised return negatived the basis for penalty.

Conclusion: Penalty under section 18(1)(a) was not exigible, and the cancellation of penalty was upheld in favour of the assessee.

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