TaxTMI 
TaxTMI 
2006 (10) TMI 78
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....ified in law in holding that the penalty proceedings were valid in view of section 42C inserted in the Wealth-tax Act ?" 2 The petitioner who did not file wealth-tax returns for the above assessment years was served with separate notices under section 18(2) of the Wealth-tax Act proposing to levy penalty under section 18(1) of the said Act. Since the petitioner did not respond to notices, fresh notices were issued on October 16, 1989, against which petitioner filed replies stating that he could file returns only by October 23, 1987, on account of search in his business premises by the Income-tax Department. Even though petitioner requested to drop the penalty proceedings no contention was raised that the notice proposing penalty was ille....
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.... he has produced original of the same before us. We find from the notice that it is in printed form and is one issued under section 18(2) of the Act. The proposal in the ultimate portion of the notice is to levy penalty under section 18(1) of the Act. Three situations are covered by the notice, which can obviously be alternative or cumulative. The first one is failure to file return, the second one is failure to comply with notice issued under section 16 and the third one is for concealment of particulars of net wealth or deliberately furnishing inaccurate particulars. We find from the original notice produced in the court that two grounds were struck off and the proposal in the notice is to levy penalty under section 18(1) only for default....
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....ct, if any, in the notice proposing penalty is so insignificant and its validity is therefore protected by virtue of operation of section 42C of the Act which came into force by introduction of the Taxation Laws (Amendment) Act, 1975, with effect from October 1, 1975. Since the Tribunal has upheld the penalty proceedings by reference to section 42C and the question referred is also with reference to the section, we extract hereinbelow section 42C for easy reference : "42C. Return of wealth, etc., not to be invalid on certain grounds. —No return of wealth, assessment, notice, summons or other proceeding furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisio....
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....s business premises. Therefore, not only that the officer has issued the notice as one proposing penalty for failure to file return, but the assessee has also understood it in the same manner and has replied answering the allegation on merits. In this case, petitioner himself admits that he has not filed return under section 14(1) but has filed a belated return against a notice under section 17 of the Act. Therefore, it is obvious that penalty proposed is for not filing the return in terms of requirement of section 14(1) of the Act. The position would have been different had the petitioner filed return under section 14(1) and was called upon to file another return by notice issued under section 17 of the Act which does not arise in this cas....