1979 (5) TMI 27 - AT - Wealth-tax

Summary

Issues:
1. Whether the assessee was prevented by a reasonable cause in filing the return within the due date for the assessment year 1970-71.

Detailed Analysis:
The appeal before the Appellate Tribunal ITAT Amritsar involved the question of whether the assessee had a reasonable cause for not filing the return within the stipulated time for the assessment year 1970-71. The appeal was filed on behalf of the deceased assessee by his legal heir. The assessee failed to file the return by the due date despite receiving notices under relevant sections of the Wealth Tax Act, 1957. The Wealth Tax Officer (WTO) initiated penalty proceedings for the default under section 18(1)(a) of the Act. The assessee contended that being an agriculturist, he was unaware of the legal obligations and believed his wealth was below the taxable limit. Both the WTO and the Appellate Commissioner (AAC) upheld the penalty.

The Tribunal considered the arguments presented by the assessee's counsel, who claimed that the assessee's belief that his wealth was below the taxable limit justified the delay in filing the return. The Revenue's representative pointed out that the assessee had filed a return for the previous assessment year only after receiving a notice from the WTO. The Tribunal noted that the assessee's belief was not altered by the assessment proceedings for the previous year, as the return was filed in response to a notice. However, the Tribunal held that once a notice under section 17 was served on the assessee, he was legally obligated to comply and could no longer claim ignorance of the law or belief in his wealth being below the taxable limit. The Tribunal ruled that the default for penalty purposes would start from the date of service of the notice under section 17, and no penalty would be imposed for the period before that date.

In conclusion, the Tribunal partially allowed the appeal, ruling that the assessee could not continue to claim a belief in his wealth being below the taxable limit after being served with a notice under section 17, and the penalty would only apply from the date of service of that notice.