COMMISSIONER OF WEALTH TAX Vs. P NAINAKHAN

JUDGEMENT

(1.) PURSUANT to the directions of this court in T.C.P. Nos. 224 and 225 of 1981, the Tribunal referred the following two common questions of law for the assessment years 1974-75 and 1975-76, under section 27(3) of the Wealth-tax Act, 1957 (hereinafter referred to as "the Act"), for the opinion of this court."1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in cancelling the penalty levied under section 18(1)(a) of the Wealth-tax Act, 1957 ?.2. Whether the Appellate Tribunal had any valid material to hold that the assessee has no mens rea for furnishing the return belatedly and as such the penalty levied under section 18(1)(a) was not warranted ?" The assessee is an individual. For the assessment year 1974-75, the assessee filed his wealth-tax return belatedly on January 16, 1976, after having filed an application for extension of time up to November 30, 1974.

(2.) THE Wealth-tax Officer initiated penalty proceedings under section 18(1)(a) of the Act for the delay in filing the wealth-tax return. THE assessee had not replied to the penalty notice issued under section 18(1)(a) of the Act. THE Wealth-tax Officer pointed out that the assessee has applied for extension of time only up to November 30, 1974THE assessee had been assessed to wealth-tax from the assessment year 1970-71 onwards. THE Wealth-tax Officer held that therefore the assessee should have promptly filed his wealth-tax return within the time-limit under section 14(1) of the Act. Since the assessee failed to do so, penalty was levied at Rs. 10, 605For the assessment year 1975-76, the assessee filed his wealth-tax return on January 16, 1976, after having applied for extension of time up to September 30, 1975. THE Wealth-tax Officer initiated proceedings under section 18(1)(a) of the Act. In this year also, the assessee did not reply to the penalty notice. For the reasons stated in the earlier assessment order, the Wealth-tax Officer levied penalty of Rs. 2, 250 under section 18(1)(a) of the ActTHE assessee filed appeals before the Appellate Assistant Commissioner for both the assessment years under consideration. According to the Appellate Assistant Commissioner, the returns were not filed due to the assessee's ignorance of law as per the decision in P. V. Devassy v. CIT.