2018 (8) TMI 1491 - AT - Wealth-tax

Penalty u/s 18(1)(c) of the Wealth Tax Act - concealment of particulars of wealth - assessee filed the wealth tax return only after issuance of notice u/s 17(1A) - Held that - The records placed before us shows that the allegations made by both the lower authorities is not correct, as the assessee filed the return few days before the notice issued u/s 17(1A) of the Act. The assessee voluntarily paid taxes and declared total wealth in the return of wealth tax. In this situation the assessee cannot not be held to have concealed the particulars of wealth. As regards non inclusion of value of Indica car of ₹ 1,81,772/- in the computation of wealth, we observe that the assessee has disclosed the value of other remaining three cars and the total value of assets excluding the value of Indica Car has been disclosed at ₹ 1,00,58,811/-. We find merit in the contention of the assessee that due to inadvertence and without having any mensrea of evading the wealth tax, the assessee failed to include the value of Indica Car in the computation of wealth and for such un intentional error the assessee should not be visited with penalty. Both the lower authorities were not justified in confirming the penalty of ₹ 1,00,000/- u/s 18(1)(c) - Decided in favour of assessee

Summary

Issues:
Levy of penalty under section 18(1)(c) of the Wealth Tax Act for not furnishing accurate particulars of total taxable wealth.

Analysis:
The appeal pertains to the Assessment Year 2011-12 against the penalty imposed by the Assessing Officer under section 18(1)(c) of the Wealth Tax Act. The Assessing Officer observed that the value of a car was not included in the wealth computation, leading to penalty proceedings being initiated. The appellant contested the penalty, arguing that the wealth tax return was filed before the notice was issued and that the omission was due to inadvertence. The Departmental Representative supported the lower authorities' decisions.

Upon review, the Tribunal noted that the appellant, a Doctor running a diagnostic center, had filed the wealth tax return before the notice was issued. The appellant had also paid taxes and declared total wealth before the notice. The Tribunal found that the penalty was based on incorrect allegations that the return was filed after the notice. The appellant had disclosed other assets and the omission of the car's value was unintentional.

The Tribunal agreed with the appellant's contention that the omission was inadvertent and not an attempt to evade taxes. Considering the circumstances, the Tribunal held that the penalty was unjustified. Consequently, the Tribunal set aside the penalty imposed under section 18(1)(c) of the Wealth Tax Act, allowing the appeal and deleting the penalty.

In conclusion, the Tribunal found in favor of the appellant, highlighting that the penalty was unwarranted given the facts and circumstances of the case. The decision was made based on the appellant's timely filing of the return, inadvertent omission, and lack of intent to evade wealth tax. The penalty of ?1,00,000 levied under section 18(1)(c) of the Wealth Tax Act was therefore deleted.