1989 (3) TMI 101 - HC - Wealth-tax

Summary

Issues:
Levy of penalty under section 18(1)(a) of the Wealth-tax Act for failure to file returns under section 14(1) and subsequent filing in response to notices under section 14(2).

Detailed Analysis:
The judgment pertains to a case under the Wealth-tax Act where the assessee failed to file returns for the years 1973-74 and 1974-75 within the statutory period as required by section 14(1) of the Act. The Wealth-tax Officer initiated penalty proceedings under section 18(1)(a) for the default, and a penalty was levied for each assessment year. The Appellate Tribunal upheld the penalty, leading to the matter being referred to the High Court.

The central issue in this case was whether filing returns in response to notices under section 14(2) of the Wealth-tax Act after committing a default under section 14(1) would absolve the assessee of the earlier default. The Tribunal held that such filing did not erase the initial default under section 14(1), which was supported by legal precedents from other High Courts.

The High Court analyzed the legal position and observed that the mere act of filing returns in response to notices under section 14(2) did not negate the liability for the earlier default under section 14(1). The court referred to similar provisions in the Income-tax Act and decisions from various High Courts, emphasizing that failure to file returns within the prescribed time attracts penalties even if returns are later filed in response to notices.

Citing judgments from multiple High Courts, the High Court concluded that the penalty levied for the default in filing returns under section 14(1) was justified. The court held that the levy of penalty under section 18(1)(a) of the Wealth-tax Act for both years was proper, and the Tribunal's decision to uphold the penalty was in accordance with the law.

Therefore, the High Court answered the question referred in the affirmative, ruling in favor of the Revenue and against the assessee. The judgment will be forwarded to the Income-tax Appellate Tribunal, Cochin Bench, as required by law.