Penalty for late wealth-tax return failed where bona fide belief that net wealth stayed below the taxable limit was not disproved.

Penalty for delay in filing a net wealth return was held unsustainable because the Department did not discharge the initial burden in penalty proceedings. Although the assessee had earlier been subject to wealth tax and awareness of the filing obligation could be presumed, there was no material showing that, on the due date, he knew his net wealth exceeded the taxable limit. The original return disclosed wealth within the tax-free slab, and the valuation adopted there was not shown to be lacking bona fides. A later revised return, by itself, did not establish deliberate or contumacious default.

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Issues: Whether penalty for delay in filing the return of net wealth was justified when the assessee contended that he believed his net wealth was below the taxable limit.

Analysis: The assessee had earlier been a wealth-tax assessee, so awareness of the filing obligation could be presumed. However, the Department was still required to discharge the initial onus in penalty proceedings. There was no material to show that, on the due date, the assessee knew his net wealth exceeded the taxable limit. The original return disclosed a net wealth within the tax-free slab, and there was nothing to show that the valuation adopted there was not bona fide. The later revised return, filed much later, did not by itself establish that the original delay was deliberate or contumacious.

Conclusion: The penalty was not sustainable and the assessee succeeded.

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