Law:

Section:

Section 18(1)(a) of the wealth-tax act, 1957- Penalty-For late filing of return-Whether default under section 14(1) continues after issue of notice under section 14(2)- Held, yes-Whether issuance of notice under section 14(2) can dispense assesses from default under section 14(1)-Held, no Section 18(5) of the wealth-tax act, 1957- Penalty-Period of limitation for imposition of-Whether order of WTO pursuant to remand by appellate authority for reconsideration is subject to period of limitation contained in section 18(5)-Held, no Facts Consequent on the assessee's failure to file his wealth-tax return within the time prescribed under section 14(1), the WTO issued notice under section 14(2). The assessee then filed his return but well after the time allowed to him by the WTO in the notice. The WTO imposed penalty under section 18(1)(a ). The assessee contended that no penalty could be levied as there was no proper service of notice issued under section 14(2). The Tribunal held that the notice under section 14(2) was not properly served and that although the case was a fit one to be remanded to the WTO for giving another opportunity to the assessee to show cause against the imposition of penalty under section 14(1), in view of the provisions of section 18(5), the WTO could not impose penalty as his order would be barred by limitation. It, accordingly, set aside the impugned order. On reference: Held A penalty is imposed on account of the commission of a wrongful act. One of the wrongful acts specified in section 18(1)(a) which attracts penalty, is the failure of the assessee to furnish the return which he is required. to furnish under section 14(1) , without reasonable cause. Therefore, as soon as there is failure on the part of the assessee to furnish the return, as required by section 14( 1), without reasonable cause, the wrongful act attracting penalty under section 18(1 )(a) takes place and it is in the law operating on the date on which the wrongful act is committed, which determines the penalty. The wrongful act committed does not cease to be a wrongful act by the issuance of a notice under section 14( 2). Therefore, even in a case where the department issues…

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