COMMISSIONER OF WEALTH TAX Vs. MANIBEN MAHADEV

JUDGEMENT

(1.) THE Tribunal, Ahmedabad 'A' Bench at the instance of CWT, Rajkot has referred the following questions of law arising out of its order dt. 28th Feb., 1980 in WTA No. 142/Ahd/1978 79 for the asst. year 1969 70 :

(2.) THE facts necessary for the present purposes are that the assessee filed return of his net wealth for the asst. year 1969 70 on 23rd Jan., 1971. As the return was filed late, a notice was issued to the assessee by the WTO to show cause as to why for late filing of return penalty be not levied. The assessee pleaded existence of reasonable cause for not submitting the return of net wealth within time. He simultaneously also approached the CWT under S. 18(2A) of the WT Act for reducing or waiving the penalty under S. 18(1)(a). Before the WTO could complete the penalty proceedings in this regard, the CWT made an order for reducing the penalty imposable on the assessee by 50% of the minimum penalty that could be imposed under the penalty provision. Thereafter, the WTO passed an order on 17th Jan., 1973 rejecting assessee's plea about existence of sufficient cause for not filing returns within time and finding that the penalty leviable under the section comes to Rs. 29,040, finally levied penalty as reduced by the order of the CWT under S. 18 (2A) of the Act. The assessee appealed against the order of levy of penalty before the AAC. The AAC found the penalty proceedings are quasi criminal in nature and ingredients of default attracting penalty under S. 18(1)(a) has to be established by Revenue. The necessary ingredient of default under S. 18(1)(a) is 'failure to file return without reasonable cause', and not mere failure to file return. As Revenue has not established that failure to file return was without reasonable and sufficient cause, he deleted the penalty. It may be noticed here that the appeal before the AAC was filed late and delay in late filing was condoned. Necessary facts regarding thereto we shall avert to later on. However, we also notice that no objection as to maintainability of the appeal was raised before the AAC. Before the Tribunal it was urged that AAC erred in entertaining the appeal when the WTO has merely given effect to order of CWT while exercising powers under S. 18(2A) and reduced the amount of penalty from Rs. 29,040 to Rs. 14,520. The contention in support of the above submission was that the AAC erred in overlooking the provisions of S. 18(2B) according to which the order under S. 18(2A) would be final and could not be called in question before any Court of law or any other authority the Tribunal rejected the contention and on merits upheld the order of the AAC. It appears that no contentions were raised before the Tribunal on the merits of the case.

(3.) FROM the perusal of the relevant provision as it existed during the relevant time it would be apparent that when an assessee who has without reasonable cause failed to furnish the return which is required to be furnished under Sub S. (1) of S. 14 or under Sub S. (2) of S. 14 within the time allowed and in the manner required by Sub S. (1) of S. 14, penalty to the extent provided in sub cl. (i) could be levied on the assessee in addition to tax. Words 'without reasonable clause' were omitted by Taxation Laws (Amendment & Misc. Provisions) Act, 1986 w.e.f. 10th Sept., 1986. However, proviso was added stating that no penalty was imposable if the person proves that there was reasonable cause for the failure referred to in cl. (a) or cl. (b) as the case may be of S. 18(1). The present case is governed by the provision as it existed before amendment.