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Issues:
1. Cancellation of penalties levied by WTO under section 18(1)(a) of the WT Act, 1957. 2. Adequacy of reasonable opportunity given to the assessee before the imposition of penalties. Detailed Analysis: 1. The appeals by the revenue were directed against the AAC's order canceling penalties levied by the WTO under section 18(1)(a) of the Wealth Tax Act, 1957. The assessee had filed wealth tax returns for specific assessment years after the due dates, leading to penalty proceedings initiated by the WTO. The AAC canceled the penalties based on the grounds that the assessee had not been given a reasonable opportunity to be heard before the penalties were imposed. The AAC found discrepancies in the penalty proceedings and observed that the penalties were substantial, exceeding the total assessed wealth of the appellant, and required a more thorough opportunity for the assessee to respond adequately. 2. The crux of the issue revolved around whether the assessee was afforded a reasonable opportunity before the imposition of penalties. The AAC's decision was based on the failure of the WTO to provide a meaningful opportunity for the assessee to present explanations for delayed submission of returns. The WTO fixed the penalty hearing on short notice, allowing only two days for the assessee to represent their case. The AAC found that the timeline provided was insufficient, especially considering the complexity and significance of the penalty proceedings. The appellate tribunal upheld the AAC's decision, emphasizing that the WTO's actions did not align with the principles of natural justice and the requirements of section 18(2) of the WT Act. The tribunal concluded that the penalties were canceled rightfully due to the lack of a reasonable opportunity provided to the assessee. 3. The legal representatives for both parties presented arguments regarding the adequacy of the opportunity given to the assessee. The departmental representative contended that the assessee had been aware of the penalty proceedings since 1978 and had been granted sufficient time to respond. On the other hand, the counsel for the assessee reiterated that the penalties were imposed arbitrarily and without due consideration of the explanations provided. The counsel referenced various legal precedents to support the contention that the penalties were unjustly levied. Ultimately, the tribunal agreed with the assessee's position, highlighting the importance of a reasonable opportunity being granted before imposing penalties under section 18(1) of the WT Act. In conclusion, the appellate tribunal upheld the AAC's decision to cancel the penalties, emphasizing the necessity of providing a reasonable opportunity for the assessee to be heard before the imposition of penalties. The judgment serves as a reminder of the significance of adhering to procedural fairness and natural justice principles in penalty proceedings under the Wealth Tax Act.
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