Law:

Section:

Section 18(1)(a) of the Wealth-tax Act, 1957 - Penalty - For late filing of return - Assessment years 1965-66 to 1969-70 - Whether penalty under section 18(1)(a) is to be imposed with reference to tax mentioned in demand notice and not with reference to tax still outstanding on date on which WTO passes penalty order - Held, yes FACTS The assessee filed his returns after some delay. The WTO accepted the returns and passed an order on the same day. Subsequently, WTO issued a notice proposing to impose penalty on the assessee. The various submissions made by the assessee were repelled and varying amounts of penalty were imposed. The assessee went up in appeal, but failed. On further appeals, the Tribunal cancelled the penalty as no tax was outstanding on date on which penalty order was passed. According to the Tribunal, the phrase "tax, if any, payable by him" occurring in section 18(1)(i) meant the tax outstanding on the date of penalty order. On reference : HELD The view taken by the Tribunal that the amount of penalty had to be determined with reference to the tax still outstanding on the date on which the WTO passed the penalty order was not acceptable. The crucial amount was that which was mentioned in the demand notice. Therefore, penalty under section 18(1)(a ) in the instant case was to be imposed with reference to the tax mentioned in the demand notice. Note : The decision was in favour of revenue. CASES REFERRED TO CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC), CIT v. Vegetable Products Ltd. [1971] 80 ITR 14(Cal.) and CIT v. Hindustan Industrial Corporation [1972] 86 ITR 657 (Delhi). JUDGMENT Satish Chandra, J.-For the five assessment years 1965-66 to 1969-70, the assessee filed his return under the W.T. Act on 28th February, 1970. The same day the WTO passed an assessment order accepting the wealth returned for each of the five years. Subsequently, he issued a notice proposing to impose penalty on the assessee. In response, the assessee appeared and made several submissions as to why the returns were filed with delay. The various submissions were repelled and varying amounts of penalty were imposed by an order dated January 2, 1971. The assessee…

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