1979 (8) TMI 31 - HC - Wealth-tax

Summary

Issues:
1. Delayed filing of returns under the Wealth-tax Act for the assessment years 1967-68 and 1970-71.
2. Imposition of penalty under section 18(1)(a) for late submission of returns.
3. Consideration of reasonable cause for delay in filing the returns.
4. Calculation of penalty rate based on the law prevailing before April 1, 1969.

Analysis:
The judgment pertains to the delayed filing of returns under the Wealth-tax Act for the assessment years 1967-68 and 1970-71. The assessee failed to file returns by the due dates, prompting the WTO to issue notices under section 14(2) of the Act. The assessee cited reliance on an advocate, K. P. Chaterji, for maintaining accounts and valuation of the property, leading to delays in filing the returns. The Tribunal considered whether the delay up to June 1970 was due to a reasonable cause, given the ongoing valuation dispute. The AAC and the Tribunal upheld penalties for delayed submission of returns, prompting a reference to the High Court.

The first issue addressed was whether there was a reasonable cause for the delayed returns. The assessee argued that the delay was due to mistaken advice from the advocate, invoking Supreme Court decisions to support the contention that such advice could justify condonation of delay. However, the High Court noted that the Tribunal did not ignore the advocate's deposition as alleged by the assessee. The Tribunal considered the advocate's lack of awareness of legal changes and penalty provisions, indicating that the delay until June 1970 was reasonable due to the ongoing dispute.

Regarding the second issue, the Tribunal's decision to calculate the penalty rate based on the law prevailing before April 1, 1969, was upheld by the High Court. Citing a previous High Court decision, it was established that for assessment years before April 1, 1969, the penalty rate should align with the Act as it stood during the relevant assessment year. Therefore, the Tribunal was correct in imposing the penalty at the lower rate for the assessment year 1967-68.

In conclusion, the High Court answered both questions in the affirmative, with one against the assessee and the other in their favor. The judgment highlighted the importance of considering reasonable causes for delays in filing returns and affirmed the Tribunal's decision on penalty rates based on the prevailing law. The parties were directed to bear their own costs due to partial success and failure in the case.