1975 (10) TMI 38 - AT - Wealth-tax

Summary

Issues:
Penalties under section 18(1)(a) of the Wealth Tax Act for delayed filing of returns for the assessment year 1970-71.

Analysis:
The judgment by the Appellate Tribunal ITAT Jabalpur involved four appeals filed by the WTO against the orders of the AAC cancelling penalties imposed under section 18(1)(a) of the Wealth Tax Act for the assessment year 1970-71. The appeals were related to the sons of the late Balbhadra Prasad Gupta, with three of them being minors. The returns of wealth for these individuals were due on or before 30th June 1970 but were filed only on 29th June 1971, causing an 11-month delay. The minors explained that their lack of knowledge about the requirements of the WT Act led to the delay, and they voluntarily filed the returns upon realizing their tax liability. The major brother also stated his lack of knowledge and voluntary compliance. The WTO levied penalties on all four individuals, which were later cancelled by the AAC citing reasonable cause for the delay.

In a previous order related to similar appeals by the mother of the four assesses, it was highlighted that the father of the assesses had passed away when they were minors, and it was only in 1969 that one of them attained majority. The eldest son then became the Karta of the family and had to gather information about the family's wealth for filing WT returns. The returns were filed voluntarily without waiting for a notice from the Department, and taxes were paid promptly. The Tribunal found that the assesses had not acted in deliberate disregard of their obligations but had promptly complied once it was practicable for them to do so. Considering these circumstances, the Tribunal upheld the AAC's decision to cancel the penalties, emphasizing the reasonable cause for the delay in filing the returns.

The Appellate Tribunal declined to interfere with the AAC's orders and dismissed the appeals filed by the WTO. The judgment highlighted the importance of considering the circumstances and reasons behind the delayed filing of returns, especially when assesses act promptly upon realizing their tax obligations, as was the case in this matter.