MADHUKAR MANILAL MODI Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THE petitioner the Karta of Madhukar Manilal Modi, HUF, which is assessable to wealth tax under the provisions of the WT Act, 1957 (hereinafter referred to as "the Act"). The following table furnishes the particulars with regard to the returns filed by him for three different assessment years and the assessment orders passed pursuant thereto :

(2.) BEFORE considering the case on merits, it would be convenient to refer to the relevant statutory provisions. Sec. 14, Sub S. (1), provides that every person, if his net wealth or the net wealth of any other person in respect of which he is assessable under the Act on the valuation date was of such an amount as to render him liable to wealth tax under the Act, shall, before the 30th day of June of the corresponding assessment year, furnish to the WTO a return in the prescribed form and verified in the prescribed manner setting forth the net wealth as on that valuation date. Sub s. (2) provides that if the WTO is of the opinion that any person is assessable under the Act, whether in respect of his net wealth or the net wealth of any other person, then, notwithstanding anything contained in Sub S. (1), he may serve a notice upon such person requiring him to furnish within such period, not being less than thirty days, as may be specified in the notice, a return in the prescribed form and verified in the prescribed manner, setting forth along with such other particulars as may be required by the notice, the net wealth of such person as on the valuation date mentioned in the notice. Sub s. (3) empowers the WTO to extend the date for the delivery of the return under the section if he is satisfied that it is necessary so to do. Sec. 18 provides for penalty for failure to furnish returns, etc. The relevant part of S. 18 may be set out in extenso :

(3.) NOW , in the present case, it is not in dispute that no notice under S. 14(2) was served upon the petitioner. It is also not in dispute that the petitioner failed to furnish a return to the WTO in respect of the three assessment years in question within the time limited by law. Penalty was, therefore, imposable upon him under the relevant provisions of law unless reasonable cause was shown. Under these circumstances, the petitioner approached the CIT under S. 18(2A) requesting that he should, in his discretion, waive the amount of minimum penalty imposable upon him. The CIT acceded to the request of the petitioner in so far as it related to the asst. year 1971 72. He, however, rejected the request of the petitioner in so far as it related to asst. yrs. 1969 70 and 1970 71. The grounds on which the request was rejected were :