1980 (5) TMI 53 - AT - Wealth-tax

Summary

Issues:
Penalties under s. 18 (1) (a) of WT Act for the asst. yrs. 1972-73 to 1974-75.

Detailed Analysis:

Issue 1: Levy of Penalties
The appeals were against penalties imposed for late filing of returns for the assessment years 1972-73 to 1974-75. The WTO initiated penalty proceedings due to belated filing of returns. The assessee explained the delay was due to the departure of an experienced accountant. The WTO found the explanations unsatisfactory and levied the penalties. The AAC upheld the penalties, dismissing the appeals.

Issue 2: Second Appeal
The assessee argued in the second appeal that returns were filed voluntarily to cooperate with the Department. The difference in wealth was due to disputed tax liability. The assessee highlighted difficulties in maintaining accounts after the accountant's departure and subsequent challenges in finding a qualified replacement. The assessee contended that there was no wilful neglect and cited the delay in preparing balance sheets as reasonable cause.

Issue 3: Department's Position
The department argued that new facts were presented by the assessee. They contended that the returns were not voluntary, and s. 14(2) notices were issued for 1972-73. The department questioned the absence of the balance sheet before the authorities and the lack of evidence supporting the contentions regarding the accountant's death.

Issue 4: Tribunal's Decision
The Tribunal found that the case did not warrant penalties under s. 18(1) (a). They noted the absence of s. 14(2) notices for two of the years in question. The Tribunal emphasized that the reasons for delay were provided by the assessee and should have been tested by the authorities. They highlighted the importance of assessing explanations offered by the assessee and found that the delays in filing were not inordinate considering the circumstances. The Tribunal concluded that the absence of a proper accountant constituted a reasonable cause for the delayed filings and thus canceled the penalty orders.

In conclusion, the Tribunal ruled in favor of the assessee, canceling the penalties imposed for late filing of returns for the mentioned assessment years based on the grounds of absence of a proper accountant as a reasonable cause for the delays.