Law:

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Section 18(1)(a) of the Wealth-tax Act, 1957 - Penalty - For late filing of return - Assessee filed late returns for the assessment years 1971-72 and 1972-73 and gave no explanation for delay to WTO who imposed penalty - AAC rejected assessee's explanation and upheld WTO's order - Tribunal cancelled penalty by observing that WTO's order was cryptic and non-speaking - Whether Tribunal was justified in its action without taking into account the fact that assessee had been granted reasonable opportunity by AAC to offer explanation - Held, no Facts The assessee filed returns for the assessment years 1971-72 and 1972-73 belatedly on 16-8-1974. During penalty proceedings for delayed filing of returns, no explanation was offered by the assessee to the WTO, who imposed penalty for both the years under section 18(1)(a). On appeal before the AAO, the assessee did offer an explanation, but the AAC rejected it and upheld the penalty order. On further appeal, the Tribunal cancelled the penalty on the ground that the WTO's order was cryptic and non-speaking. On reference: Held In the instant case, the AAC had heard the assessee and his explanation had been found to be unacceptable. The assessee had also shown no reasonable cause. Therefore, the Tribunal was not justified in cancelling the penalty imposed on the assessee. Case referred to Sardar Pritam Singh v. CIT [1985] 154 ITR 133 (MP). B.K. Rawat for the Applicant. JUDGMENT Pathak, J. - In pursuance of the direction of this Court under section 27(3) of the Wealth-tax Act, 1957 in Misc. Civil Case No. 522 of 1981, dated 18-11-1982, the Tribunal has stated the case and referred the following question of law for this Court's opinion: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in cancelling the penalty of Rs. 3,000 and Rs. 16,500 as imposed by the WTO under section 18(1)(a) of the Wealth-tax Act, 1957 for the assessment years 1971-72 and 1972-73, without taking into account that the assessee was given opportunity by the AAC to give his explanation on the question of delay and to substantiate the same?" 2. The assessee filed his returns of wealth for the two years in…

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