COMMISSIONER OF WEALTH TAX Vs. SHRIKANT RAMNARAYAN MOR

JUDGEMENT

(1.) THE assessee was assessed to wealth tax for the asst. year 1966 67. Though the assessee ought to have filed a return by 30th June, 1966, he did not file any return under S. 14(1) of the WT Act, 1957, in spite of time being granted to him from time to time up to 31st Aug., 1966. A notice under S. 17 r/w S. 14(2) of the Act was served on the assessee on 15th Dec., 1970, and an assessment order under S. 16(5) was made on 27th Dec., 1971 (sic). A notice to show cause why penalty should not be imposed under S. 18(1)(a) of the Act was issued on 27th Feb., 1971. It may be pointed out that the material part of S. 18 which dealt with penalty as it was in force w.e.f. 1st April, 1965, having been so introduced by S. 18 of the WT (Amend.) Act, 1964, read as follows :

(2.) CLAUSE (i) in S. 18(1) as it stands today is in force since 1st April, 1976, but at the time when the order of penalty was passed, the relevant provision as introduced by S. 24 of the Finance Act, 1969, in place of the original cl. (i) and cl. (ii) with the Explanation read as follows :

(3.) THE WTO did not compute any amount by way of penalty for the period 1st Oct., 1968, to 31st March, 1969. In appeal, the AAC held that the maximum penalty imposable at 50per cent of the tax having been already imposed by the WTO at the rate of 2per cent of the tax for delay of each month, it was not open to the WTO to impose penalty once again on the footing that the assessee was a defaulter after 1st April, 1969, by applying the amended provisions of S. 18(1)(a)(i). It may be pointed out here that 25 months of default ended on 30th Sept.. 1968. The AAC reduced the amount of penalty to Rs. 263. The Department filed an appeal before the Tribunal and the Tribunal took the view that the penalty had to be determined in accordance with the law as it stood on the date on which the default occurred. The Tribunal found that the default had occurred before 1st April, 1969, and the penalty, therefore, had to be determined in accordance with the provisions of s. 18(1)(a)(i) as it then stood, and the amended provisions were not attracted.