Law: Wealth Tax Act, 1957

Section: 14(2),16(5),18(1)(a),27(1),11(1)(a),5(1) (xxxii)

Wealth tax- -- Penalty-.Failure to file wealth-tax return in response to notice--Net wealth not within taxable limit-Failure to file return cannot be said to be without reasonable cause-Tribunal not addressing itself to this question-Case remanded. JUDGMENT R. C. MANKAD, J.-The W. T. O. issued a notice under section 14(2) of W. T. Act, 1957 (hereinafter referred to as "the Act"), calling upon the assessee to furnish return of wealth for each of the assessment years 1973-74 and 1974-75. The assessee, however, failed to furnish the return. The W. T. O. proceeded tinder section 16 (5) of the Act and determined the assessee's net wealth at Rs. 1,70,000 in each of the assessment years 1973-74 and 1974-75 and initiated penalty proceedings under section 18 (1) (a) of the Act. The assessee did not submit any explanation or reply to the show-cause notice issued to her by the W.T.O. The N'.T.O. levied penalty of Rs. 15,400 and Rs. 11,200 for the assessment years 1973-74 and 1974-75, respectively, under section 18(1)(a) of the Act. In the appeals preferred by the assessee, the A. A. C. set aside the orders levying penalty on the ground that the assessee's wealth was not taxable in each of the years under reference. Revenue went up in appeal before the Income-tax Appellate Tribunal (hereinafter referred to as "the Tribunal") and challenged the orders of the A. A. C. The Tribunal did not go into the question whether or not the asses see had without any reasonable cause failed to furnish a return of her wealth in each of the said years in response to the notice under section 14(2) of the Act. According to the Tribunal, a failure to furnish the returns in response to the notice under section 14 (2), by itself, attracted penalty. 1n the result, it set aside the orders passed by the A. A. C. and restored the orders of W. T. O. levying penalty as stated above. It is in the background of the above facts that at the instance of the assessee the following questions have been referred to us for our opinion under section 27(1) of the Act "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee was bound to file the…

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