1981 (1) TMI 90 - AT - Wealth-tax

Summary

Issues:
1. Penalty sustained for a delay under s. 18(1)(a) of the WT Act for the assessment year 1972-73.
2. Consideration of extension applications filed by the assessee.
3. Interpretation of provisions under the WT Act regarding extension of time.
4. Application of legal precedents from Punjab and Haryana High Court, Patna High Court, and Andhra Pradesh High Court.
5. Justification for the delay in filing the wealth-tax return.

Analysis:
1. The appeal before the Appellate Tribunal ITAT Amritsar involved a penalty sustained by the assessee for a delay in filing the wealth-tax return under section 18(1)(a) of the Wealth Tax Act for the assessment year 1972-73. The Wealth Tax Officer (WTO) imposed a penalty for a default of five complete months, which was reduced by the Appellate Assistant Commissioner (AAC) to three months based on the acceptance of extension applications filed by the assessee.

2. The AAC accepted the first extension application filed on time by the assessee, granting an extension up to 30th September, 1972. However, the second application, filed on 22nd January, 1973, was considered out of time by the AAC. The assessee argued that the second extension application should have been accepted, citing legal precedents from Punjab and Haryana High Court and Patna High Court supporting the consideration of belated extension applications by the tax authorities.

3. The Appellate Tribunal analyzed the provisions of the Wealth Tax Act regarding extension of time for filing returns. While no specific form for seeking extension is prescribed under the Act, the language used provides wide discretion to the WTO to extend the date for return filing based on the satisfaction of the circumstances necessitating an extension. The Tribunal agreed with the opinion of the Patna High Court, emphasizing that the assessee must demonstrate reasonable cause for the delay in filing the return.

4. Legal arguments presented by both parties referenced conflicting decisions from High Courts, including the Punjab and Haryana High Court, Patna High Court, and Andhra Pradesh High Court. The Tribunal distinguished between the provisions of the Income Tax Act and the Wealth Tax Act, highlighting the need for the assessee to satisfy the tax authorities regarding the necessity for an extension of time.

5. Ultimately, the Tribunal held that the application for extension filed on 22nd January, 1973, should have been considered by the WTO, even though it was not available in the assessment records. The Tribunal reasoned that the assessee's belief that the extension had been granted, coupled with the absence of rejection by the WTO, constituted reasonable cause for the delay. As a result, the penalty imposed under section 18(1)(a) of the Wealth Tax Act was deemed unjustified, and the penalty sustained by the AAC was deleted, leading to the allowance of the appeal.