2019 (9) TMI 1102 - AT - Wealth-tax

Non filing of return of wealth under Wealth Tax Act - Penalty levied u/s 18(1)(c) of the Wealth Tax Act - HELD THAT - Assessee did not file return of wealth under Wealth Tax Act voluntarily. The assessee did not dispute the service of notice u/s 17(1) of the Wealth Tax Act before the AO at assessment proceedings or otherwise. Therefore it is a fit case of levy of penalty u/s 18(1)(c) of the Wealth Tax Act. Therefore agree with the view of the Ld Accountant Member that penalty be imposed against the assessee. Dismiss all the appeals of the assessee. Let the files be put up before the regular bench for passing the consequential order.

Issues Involved:
1. Relevance of service of notice under Section 17(1) of the Wealth Tax Act.
2. Material date for the purpose of levy of penalty.
3. Objection to service of notice during assessment proceedings.
4. Voluntariness of the return filed by the assessee.
5. Rebuttal of statutory presumption of service of notice.
6. Validity and effectiveness of affidavits filed by the assessee.
7. Nature of penalty under Section 18(1)(c) of the Wealth Tax Act.
8. Applicability of the decision in Hindustan Steel Ltd. v. State of Orissa.

Issue-wise Detailed Analysis:

1. Relevance of Service of Notice under Section 17(1):
The Tribunal examined whether the service of notice under Section 17(1) is relevant in the given facts and circumstances. It was noted that the notice did not return back, thus presuming it was served. The assessee did not dispute the service of notice during the assessment proceedings, which culminated in assessments under Section 16(3) read with Section 17(1). The Tribunal concluded that service of notice was presumed and not objected to by the assessee.

2. Material Date for Levy of Penalty:
The Tribunal considered whether the material date for penalty is the date of detection of escaped wealth or the date of furnishing the return by the assessee. It was determined that the penalty is based on the law ruling on the date when the act of concealment took place. The Tribunal held that the concealment was complete when the assessee did not file the return within the stipulated period, thus warranting the penalty under Section 18(1)(c).

3. Objection to Service of Notice During Assessment Proceedings:
The Tribunal addressed whether the service of notice could be objected to in the current proceedings. It was noted that the assessee participated in the assessment proceedings without raising any objections regarding the service of notice. Thus, the finality of the assessment could not be disturbed in the penalty proceedings.

4. Voluntariness of the Return Filed by the Assessee:
The Tribunal evaluated whether the return filed by the assessee could be regarded as voluntary. It was found that the return was filed only after the issuance of notice under Section 17(1) and beyond the period of limitation. Therefore, the return could not be considered voluntary, and the assessee was deemed to have concealed the particulars of the asset.

5. Rebuttal of Statutory Presumption of Service of Notice:
The Tribunal examined whether the assessee effectively rebutted the presumption of service of notice. It was concluded that the affidavit filed by the assessee did not dispute the service of notice. Consequently, the presumption of service stood unrebutted, and the notice was deemed served.

6. Validity and Effectiveness of Affidavits Filed by the Assessee:
The Tribunal scrutinized the affidavits submitted by the assessee. It was determined that the affidavits did not make any averments regarding the non-service of notice and thus did not effectively discharge the onus on the assessee. The affidavits were deemed insufficient to prove non-service.

7. Nature of Penalty under Section 18(1)(c):
The Tribunal deliberated on whether the penalty under Section 18(1)(c) is a civil liability or a criminal/quasi-criminal liability. It was held that the penalty is a civil liability, as established in previous judgments by the Supreme Court. The Tribunal affirmed that the penalty is imposed for the wrongful act of concealment, which was complete when the assessee failed to file the return within the stipulated period.

8. Applicability of Hindustan Steel Ltd. v. State of Orissa:
The Tribunal considered the applicability of the decision in Hindustan Steel Ltd. v. State of Orissa. It was concluded that the case law cited by the assessee was not applicable to the present case, as it pertained to different circumstances. The Tribunal emphasized that voluntary disclosure does not absolve the assessee from penalty, especially when the return was filed after detection by the department.

Conclusion:
The Tribunal concluded that the assessee did not file the return of wealth voluntarily and failed to rebut the presumption of service of notice. The penalty under Section 18(1)(c) was justified due to the concealment of assets. The appeals of the assessee were dismissed, and the penalty was upheld. The decision was pronounced in the open court on September 20, 2019.

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