1981 (4) TMI 36 - HC - Wealth-tax

Summary

Issues involved: The judgment deals with the levy of penalty under section 18(1)(a) of the Wealth Tax Act, 1957 for failure to furnish a return of wealth in response to a notice under section 14(2) for the assessment years 1973-74 and 1974-75.

Summary:
The Wealth Tax Officer (WTO) issued a notice under section 14(2) of the Act to the assessee for the assessment years 1973-74 and 1974-75, but the assessee failed to furnish the return. The WTO determined the assessee's net wealth and initiated penalty proceedings under section 18(1)(a) of the Act. The Appellate Assistant Commissioner (AAC) set aside the penalty orders, stating the assessee's wealth was not taxable. The Income-tax Appellate Tribunal (Tribunal) upheld the penalty, stating failure to furnish returns attracted penalty. The High Court reframed the question to focus on the justification of penalty under section 18(1)(a) and remanded the matter to the Tribunal for fresh consideration.

The Tribunal's decision was questioned regarding the justification of setting aside the AAC's order and restoring the penalty levied by the WTO. The Tribunal failed to address whether the assessee's net wealth was taxable, a crucial factor for penalty under section 18(1)(a). The AAC found the wealth not taxable and set aside the penalty orders. The Tribunal should have examined if the failure to furnish the return was without reasonable cause, considering the taxable limits. The matter was remanded to the Tribunal for a fresh decision based on proper examination of the facts and relevant provisions.

In conclusion, the High Court declined to answer the reframed question and directed the Tribunal to reconsider the case in accordance with the law, allowing both parties to present additional evidence. The reference was disposed of with no order as to costs.