1980 (3) TMI 108 - AT - Wealth-tax

Summary

Issues:
Imposition of penalty under section 18(1)(a) of the Wealth Tax Act, 1957 on a deceased person and their legal representatives.

Analysis:
The appeals involved a common dispute regarding the imposition of penalties under section 18(1)(a) of the Wealth Tax Act, 1957. The deceased assessee, represented by the legal heir, had filed wealth tax returns for various assessment years. The Wealth Tax Officer (WTO) initiated penalty proceedings due to delays in filing the returns. Despite the deceased assessee's explanation, the penalty was imposed posthumously.

The legal representative contended that penalties could not be imposed on a deceased person or their legal representatives under sections 14, 15, 17, and 19(3) of the Act. The Appellate Assistant Commissioner (AAC) dismissed the appeals, stating that penalty proceedings had concluded before the assessee's death, and thus, the penalties were valid.

On appeal, the counsel for the assessee argued that penalties on a deceased person were unlawful, citing a Supreme Court decision and the Andhra Pradesh High Court case of Smt. Yawarunnissa Begum. The Department's representative justified the penalties, citing the initiation of proceedings during the assessee's lifetime.

The Tribunal found merit in the assessee's arguments, relying on the Andhra Pradesh High Court's decision. They held that penalties on a deceased person or their legal representatives were impermissible under the Wealth Tax Act. Additionally, considering the assessee's reasonable cause for delayed filings, the Tribunal canceled the imposed penalties.

In conclusion, the Tribunal allowed the appeals, ruling that penalties imposed under section 18(1)(a) of the Act on the deceased assessee were legally invalid. The Tribunal also found the assessee's reasons for delayed filings justified and canceled the penalties accordingly.