1988 (11) TMI 134 - AT - Wealth-tax

Summary

Issues:
Levy of penalty under section 18(1)(A) - Notice under section 14(2) of the Wealth Tax Act - Voluntary Disclosure Scheme benefit.

Analysis:
The judgment pertains to an assessee's second appeal against a penalty of Rs. 3,12,095 imposed under section 18(1)(A). The case dates back to the assessment year 1969-70, where the return filing deadline was extended to October 31, 1969. However, the assessee failed to file the return until December 31, 1975, under the Voluntary Disclosure Scheme. The penalty was initiated based on a notice under section 14(2) allegedly served on the assessee. The Appellate Tribunal noted the absence of direct evidence regarding the notice's service.

During the proceedings, the assessee contended that no notice under section 14(2) was served, and therefore, the voluntary return filing absolved them from penalty liability. The Departmental Representative acknowledged that in the absence of a notice served under section 14(2), no penalty could be levied. The Tribunal verified the return filing date and concluded that the return was filed voluntarily under the scheme, contrary to the WTO's assessment order.

The AAC's observation highlighted the lack of direct evidence regarding the notice issuance and service. The Tribunal scrutinized the assessment records and order sheet, finding no mention of the notice issuance or service. The Tribunal discredited the dates mentioned in the penalty order, questioning their validity. The absence of any material supporting the notice issuance or service, coupled with the WTO's inaction for an extended period, reinforced the conclusion that no notice was served.

Additionally, the Tribunal noted instances from previous assessment years where penalty proceedings were dropped due to the absence of a notice under section 14(2). Considering the lack of evidence supporting the notice service and the assessee's voluntary return filing, the Tribunal concluded that no penalty was justifiable. Consequently, the appeal was allowed, and the lower authorities' orders were annulled.