1984 (6) TMI 114 - AT - Wealth-tax

Account Books, Assessment Year, Income Tax Return, Late Filing, Reasonable Cause, Revised Return, Wealth Tax Return

Summary

Issues:
Delay in filing wealth-tax return leading to penalty under section 18(1)(a) of the Wealth-tax Act, 1957.

Detailed Analysis:

1. The case involved a delay in filing the wealth-tax return for the assessment year 1975-76, with the due date being 30-6-1975, but the return was filed on 3-3-1979 after a delay of 44 months. The penalty proceedings were initiated by the WTO under section 18(1)(a) of the Wealth-tax Act, 1957. The assessee explained the delay citing the illness and subsequent demise of her daughter, stating she was not in a fit mental state during that period. The WTO imposed a penalty of Rs. 9,988 for the delay.

2. The appeal before the learned AAC resulted in a finding that a reasonable cause existed for the delay only till 11-1-1978, based on the revised income-tax return filed by the assessee on that date. The WTO was directed to recalculate the penalty for the period from 11-1-1978 to 3-3-1979.

3. The subsequent appeal before the ITAT involved the assessee arguing for no penalty, emphasizing the reasonable cause for the delay and the absence of contumacious or deliberate default. The department, on the other hand, supported the penalty order, contending that the delay was unjustified given the circumstances. The ITAT considered various decisions on mens rea and burden of proof in penalty proceedings.

4. The ITAT analyzed the facts and circumstances, concluding that a reasonable cause for the delay existed only up to 11-1-1978, as evidenced by the filing of the revised income-tax return on that date. The absence of finalized accounts due to the circumstances beyond the assessee's control was noted. The ITAT upheld the finding that the penalty was applicable for the period after 11-1-1978 up to 3-3-1979 when the return was filed.

5. The ITAT dismissed both the appeal filed by the assessee and the appeal filed by the department, upholding the decision regarding the penalty calculation period and finding that the penalty under section 18(1)(a) was justified for the delayed filing of the wealth-tax return. The judgment emphasized the importance of establishing a reasonable cause for delays in filing tax returns to determine the levy of penalties accurately.