1981 (10) TMI 65 - AT - Wealth-tax

Tribunal cancels penalties for late tax filing due to waiting for wealth details post-audit.

PASHUPATI NATH BANERJEE. Versus WEALTH TAX OFFICER.

The Tribunal canceled the penalties imposed under section 18(1)(a) for late filing of returns for the assessment years 1971-72 and 1972-73. The delay in ... - Issues:Levy of penalty u/s 18(1)(a) for the assessment years 1971-72 and 1972-73 due to late filing of returns.Analysis:The appeals were against the penalty imposed under section 18(1)(a) for late filing of returns for the assessment years 1971-72 and 1972-73. The returns were filed after the due dates, with delays of several months. The assessee, a director of a company, attributed the delay to the unavailability of wealth particulars until the company's general body meetings were held. The contention was that until these meetings took place, it was not feasible to file the returns. Various grounds were raised against the penalty, including the argument that the penalty notice issued was not under the correct section. Both the WTO and the AAC rejected the assessee's arguments, although the penalty amount was reduced by the AAC for a shorter default period than determined by the WTO.The assessee's counsel argued that the penalty should not have been imposed as no notice under section 18(1)(a) was issued by the officer who levied the penalty. Additionally, it was contended that the delay in filing the returns was due to waiting for the general body meetings to obtain necessary wealth details post-audit. The counsel emphasized that the delay was short and not intentional disobedience of the law. The Revenue's representative countered by stating that the delay was unjustified as the wealth comprised only company deposits, and waiting for the general meetings was unnecessary. It was also argued that voluntary filing under section 14(1) of the Wealth Tax Act did not warrant penalty cancellation under section 18(1)(a).Regarding the legal aspect, it was clarified that the notice was initially issued under section 18(1)(a), and any subsequent issuance did not prejudice the assessee. The Revenue later informed that new notices were issued. The Tribunal decided to base its decision on the reasonable cause for the delay without delving into other arguments. It was noted that the assessee genuinely waited for the general meetings to file accurate returns, demonstrating no deliberate wrongdoing. The slight delay post-meetings was deemed reasonable for compiling statements and filing returns. Considering the negligible delay and overall circumstances, the Tribunal concluded that the assessee was justified in the delay due to reasonable cause. As the assessee filed returns voluntarily, paid taxes, and had no wilful disobedience, the penalties were canceled, and the appeals were allowed.