Law:

Section:

Section 18(1)(a) of the Wealth-tax Act, 1957 – Penalty – For failure to furnish returns – Assessment year 1968-69 – Whether law to be applied in penalty proceedings is law as it stands on date of commission of default and not on date when assessing authority initiated penalty proceedings or actually made order levying penalty – Held, yes – Whether any reasonable delay in preparation of particulars of assessee's income for purposes of income-tax cannot be brushed aside as irrelevant while considering whether any consequential delay in filing of same assessee's wealth-tax return was for reasonable cause or not – Held, yes – Whether where assessee's liability for income-tax was necessary particular to be ascertained for preparing their wealth-tax returns and due to delay in preparation of income-tax returns delay in submission of wealth-tax returns became unavoidable, Tribunal was justified in concluding that period of unreasonable delay in filing wealth-tax returns must be reckoned for purpose of penalty under section 18(1)(a) from date of filing income-tax returns – Held, yes FACTS The assessees filed their return of wealth, after a delay of nearly 15 months. While completing the assessments, the WTO initiated penalty proceedings under section 18(1)(a). The WTO rejected the explanations offered by the assessee and proceeded to levy penalties on both the assessees. For purposes of quantification of the penalties under section 18(1)(a)(i ), he took the period of default as the full 15 months. Besides, the Officer applied the provisions of section 18(1)(a)( i) as amended with effect from 1-4-1969, and calculated the penalty with reference to the net wealth assessed at the statutory percentage. The AAC confirmed the levy in both the cases. Before the Tribunal, the assessee contended that for the very same assessment year 1968-69, the department had accepted their Explanations for delayed submission of returns in regard to income-tax and the penalty proceedings initiated against them under the relevant provisions of section 271(1)( a) of the Income-tax Act, 1961, had been dropped. The Tribunal held that the law to be applied in a matter of levy of penalty was the law…

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