COMMISSIONER OF WEALTH TAX Vs. AMATUL KAREEM

JUDGEMENT

(1.) The assessee has to file his wealth-tax return on or before June 30, of the relevant assessment year, but filed his return of wealth for the assessment year 1960-6 1/08/1971, beyond the stipulated time under the Wealth-tax Act, 1957 (Act No. 27 of 1957), for short, "the Act". Wealth-tax assessment order for 1960-61 was made on 22/08/1972, and later on the Wealth-tax Officer initiated penalty proceedings under section 18(1)(a) of the Act. The explanation offered by the assessee for delay in filing the return was not accepted by the Wealth-tax Officer . He imposed a penalty of Rs. 1,00,130 by order dated 26/03/1975. On appeal, the penalty was confirmed by order dated 24/02/1976, but the Wealth-tax Officer was directed to compute penalty as per law prior to March 31, 1969. On further appeal to the Tribunal, following the ratio of this court in CWT v. V. R. Desai [1977] 108 ITR 787, the Tribunal by order dated 11/07/1977, held that the default committed is not a continuing offence and the default arises on the last due date to file the return. Therefore, the law prevailing as on the last day for filing the return should be applied to compute the penalty. At the instance of the Revenue, the following question has been referred :

(2.) Sri Suryanarayana Murthy, learned standing counsel for the Revenue, has stated that the failure to file the return is a continuing offence. Under section 18(1)(a), the penalty shall be payable in a sum not exceeding 1.5 times the amount of such tax in a case covered under section 18(1)(a). Subsequently, the law was amended. Following the amended law, the Wealth-tax Officer is justified in law in computing the penalty in terms thereof. In support thereof, he placed reliance on Maya Rani Punj v. CIT [1986] 157 ITR 330 (SC). Sri Ratnakar, learned counsel for the assessee, contended that as soon as the return is not filed on the last due date, the offence is complete. So it is not a continuing offence. Alternatively, he contended that the penalty cannot be more onerous than was prevailing on the date it occurred offending article 20(1) of the Constitution. He further contended that the penalty was only minimal at the point of time when his counterpart has relied on the decision of this court which now stands overruled by the decision of the Supreme Court. As a result, the question of going into the reasonableness of the explanation for non-filing of the return has to be gone into. Therefore, while answering the question, this court would give an opportunity to the assessee to give a satisfactory explanation to the Tribunal that he was prevented by sufficient cause from filing the return within time.

(3.) The respective contentions give rise to the question whether the failure to file the return is a continuing offence, and, if so, what are the criteria to determine the penalty.