1985 (1) TMI 28 - HC - Wealth-tax

Summary

Issues:
1. Interpretation of Wealth-tax Act regarding penalty on legal representative for late filing of return.
2. Justification of law governing penalty for late filing of return based on the date of satisfaction of the Income-tax Officer.

Analysis:

Issue 1:
The case involved the interpretation of the Wealth-tax Act regarding the imposition of a penalty on a legal representative for the late filing of a return. The court examined the provisions of sections 14, 18, and 19 of the Act in relation to the liability of a legal representative in such cases. The court emphasized that the liability to file a return of wealth arises only when the person is assessable on the valuation date. In this case, the legal representative was not liable to file the return as she was not assessable on the valuation date, and the deceased person was alive on that date. Therefore, the provisions of penalty under section 18 could not be applied in this situation. The court also highlighted the significance of section 19(2) and (3) which specify the procedure for assessing the wealth of a deceased person and the application of certain sections to legal representatives, excluding section 18. The court concluded that no penalty could be imposed on the legal representative in this case.

Issue 2:
The second issue raised was regarding the justification of the law governing the imposition of a penalty for the late filing of a return based on the date of satisfaction of the Income-tax Officer. The court referred to a previous Supreme Court judgment which established that the penalty for late filing must be computed in accordance with the law in force on the last day the return had to be filed. The court reiterated that the default giving rise to a penalty is committed on the last date allowed for filing the return and not on a monthly basis thereafter. However, the court determined that this issue did not arise in the present case due to the resolution of the first question in favor of the assessee. Consequently, the court answered the reference in favor of the assessee, concluding that no penalty was leviable on the legal representative for the late filing of the return.

In summary, the court interpreted the Wealth-tax Act to conclude that no penalty could be imposed on the legal representative for the late filing of the return, and the law governing penalties for late filing is based on the last date for filing the return. The judgment favored the assessee, and no costs were awarded in the case.