1987 (1) TMI 122 - AT - Wealth-tax

Summary

Issues:
1. Appeal against the cancellation of penalties for late filing of wealth tax returns for two assessment years.

Analysis:
The judgment pertains to an appeal by the Revenue against the cancellation of penalties by the Appellate Assistant Commissioner (AAC) for late filing of wealth tax returns for two assessment years. In the assessment year 1970-71, the assessee initially filed the wealth tax return on 27th July 1971, despite it being due on 30th June 1970. The net wealth declared in the return was subsequently revised twice. The AAC reduced the assessed wealth to Rs. 7,67,380. The assessee had filed extension applications citing delays in filing income tax returns, which went unanswered by the Wealth Tax Officer (WTO). The AAC accepted the contention that the applications were signed by authorized representatives and held that the WTO's duty was to intimate if an extension was not allowed. The Tribunal upheld the AAC's order, citing precedents from Bombay and Gujarat High Courts, emphasizing that non-signing of the extension application by the assessee was an irregularity, not fatal.

For the assessment year 1975-76, the return was filed on 30th January 1976, declaring a net wealth of Rs. 13,57,600, due on 30th June 1975. The WTO issued a notice for filing the return within 30 days. The assessee claimed to have filed extension applications, citing delays in filing income tax returns and the need to collect necessary details. The Tribunal upheld the AAC's decision, considering the reasons provided by the assessee for seeking extensions. The Tribunal also addressed the rate of penalty for the three-month default in the assessment year 1970-71, directing that the penalty should be computed as per the law applicable at the time of the assessment completion in December 1980.

In conclusion, the Tribunal dismissed the Revenue's appeal for the assessment year 1975-76 and partly allowed it for the assessment year 1970-71, emphasizing the importance of reasonable cause for delays in filing wealth tax returns and the application of penalty provisions in accordance with the prevailing law at the time of assessment completion.