Law: Wealth Tax Act, 1957

Section: 27(3),18(1)(a)

Wealth tax--- ----Penalty---Failure to File return in time ---Assessee given opportunity to be heard by A.A.C.---Cancellation of penalty on the ground that Wealth Tax Officer had not given assessee opportunity of being heard is not valid---Indian Wealth Tax Act, 1957, S. 18(1)(a). Sardar Pritam Singh v. CIT (1985) 154 ITR 133 (MP) fol. JUDGMENT C.P. SEN, J.--In pursuance of the direction of this Court under section 27(3) of the Wealth Tax Act 1957, in Miscellaneous Civil Case No. 522 of 1981, decided on November 19, 1982, the Income-tax Appellate 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 penalties of Rs.3,000 and Rs. 16,500 as imposed by the Wealth Tax Officer under section 18(1)(a) of the Act for the assessment years 1971-72 and 1972-73, without taking into account the fact that the assessee was given opportunity by the Appellate Assistant Commissioner to give his explanation on the question of delay and to substantiate the same?" The assessee filed his returns of wealth for the two years in dispute on August 16, 1974, while the returns were due on June 30, 1971 and July 31, 1972. Penalty proceedings for filing the returns late were started and the assessee's counsel was heard, but no reasonable cause was shown. The Wealth Tax Officer, therefore, imposed penalty of Rs. 3,000 for the assessment year 1971-72 and Rs. 16,500 for the assessment year 1972-73. The Wealth Tax Officer also levied a penalty of Rs. 1,075 for the assessment year 1973-74, which is not the subject ­matter of this reference. The assessee went up in appeals before the Appellate Assistant Commissioner, who disposed of the appeals for the years 1971-72 to 1973-74 by a common order. The explanation of the assessee that he was under a bona fide belief that only his capital in the firm was subject to wealth tax and the value of the truck owned by him was not subject to wealth tax, was not accepted. In further appeals to the Tribunal, all the three appeals were disposed…

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