Law:

Section:

Section 18(1)(a) of the wealth-tax act, 1957-Penalty-For late filing of return-assessees, being father and two sons, filed returns for several assessment years late but prior to issue of notice under section 14(2)-They gave two reasons for delay, viz., that father was ill and they were preoccupied with his treatment and that they had consulted advocates who advised them that they could file return at any time before assessments-both reasons supported by ample evidence including documentary evidence-Whether imposition of penalty for late filing of return justified-held, on facts, no Facts C, the father, and his two sons were the asses-sees and they belatedly filed returns but before notice under section 14(2) had been issued. The WTO initiated penalty proceedings for delayed submission of returns. On appeal to the AAC, the assessees stated that in view of the legal advice given to them that returns could be filed at any time before assessments were made, and their pre-occupation in the treatment of C, who was seriously ill, no particular attention was given to the furnishing of the returns. The AAC rejected these explanations, though he reduced the penalty. On further appeal by the assessees, the Tribunal accepted the assessees' explanation for delay and set aside the penalty in every case. On reference: Held Two grounds in support of the plea had been advanced by the assessees from the beginning, namely, (i) illness of C, and (ii ) the advice given by two advocates handling tax matters. There was enough material in support of the plea of illness. Apart from the affidavits, the record showed that there were certificates, clinical examination reports and prescriptions produced before the WTO. There was no material to counter these. In these circumstances, the plea of illness, which had been accepted as a fact by the Tribunal, was not open to challenge. The fact that advice was taken from two lawyers has also been asserted in the affidavits and there has been no dispute. The WTO did not choose to examine the advocates with a view to discredit the affidavits. In fact, the advocate, whose advice is said to have been taken, now appearing for the assessees, affirmed…

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