COMMISSIONER OF WEALTH TAX Vs. BHAGWAN PROSAD KANOI

JUDGEMENT

(1.) IN this application under section 27(1) of the Wealth-tax Act, 1957, the following question of law has been referred to this court for the assessment years 1964-65 to 1968-69 :

(2.) THE facts as briefly stated are that the wealth-tax returns were due from the assessee on or before June 30, 1964, June 30, 1965, June 30, 1966, June 30, 1967 and June 30, 1968, respectively. THE assessee, however, voluntarily filed the returns for the years under consideration on February 9, 1972. As the wealth-tax returns were filed late, the Wealth-tax officer issued show-cause notice to the assessee as to why penalty under section 18(1)(a) of the Act be not levied against him for each of the years under consideration. Though he was served the assessee. On the date fixed for hearing, neither appeared before the Wealth-tax Officer nor furnished any sufficient cause for the delayed filing of the returns. THE Wealth-tax Officer, therefore, inferred that the assessee had filed the returns for the year under consideration that the assessee had field the return for the years under consideration late without any reasonable cause, He, therefore imposed penalties of Rs. 16,808 (assessment year 1964-65), Rs. 21,728 (assessment year 1965-66), Rs. 17,604 (assessment year 1966-67) Rs. 12,832 (assessment year 1967-68) and Rs. 3,801 (assessment year 1968-69) against the assessee under section 18(1)(a) of the Act.

(3.) IT appears to us that the controversy in this reference is concluded by the decision of the Supreme Court in the case of Maya Rani Punj v. CIT, 1986 157 ITR 330 . There, for the assessment year 1961-62, the assessees returns of income had to be filed by September 28. 1961, but neither was the return filed by that date nor was any extension asked for, the return was filed after a delay of seven months on May 3, 1962, i.e., after the Income-tax Act, 1961, had come into force. The Income-tax Officer initiated proceedings under section 271(1)(a) of the 1961 Act holding that the assessee had not been prevented by any reasonable cause from not filing the return within time and imposed a penalty was livable under section 271(1)(a) of the 1961 Act. The amount of penalty had to be quantified according to section 28 of the 1922 Act and reduced the penalty to Rs. 400. On a reference, the High Court held that the Tribunal was not competent to reduce the penalty levied under section 271(1)(a) of the 1961 Act to a figure lower than the sum equal to two per cent. of the tax for every month during which the default continued but not exceeding in the aggregate 50 per cent. of the tax. The Supreme Court held that the default of non-filing of the return within the time stipulated by law is a continuing offence. The Supreme Court proceeded to hold that penalty is impossible not only for the first default but with reference to the continued default. Non compliance with the obligation of making a return was an infraction of law as long as the default continued.