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Issues:
1. Maintainability of penalty under section 18(1)(A) of the Wealth Tax Act. 2. Violation of principles of natural justice in penalty proceedings. 3. Failure to issue proper notices by the successor WTO. 4. Justification for delay in filing the return. Detailed Analysis: 1. The appeal before the Appellate Tribunal ITAT Jaipur challenged the maintenance of penalty imposed under section 18(1)(A) of the Wealth Tax Act for the assessment year 1974-75. The counsel for the assessee contended that the penalty order was invalid as it violated the principles of natural justice. It was argued that the WTO did not provide proper opportunity for the assessee to be heard, and the penalty order was passed without issuing a fresh notice to the appellant by the successor WTO. The counsel relied on legal precedents to support the argument that failure to inform the assessee about the continuation of penalty proceedings by the successor authority without a fresh notice amounted to a breach of natural justice. 2. The counsel further emphasized that the assessee was not given an opportunity to submit a reply, and the order passed by the WTO was behind the assessee's back, contrary to the principles of natural justice. It was highlighted that the Department should have served a notice to the assessee regarding the next date of penalty proceedings, which was not done in this case. The failure to provide a second notice after a significant gap between hearings was deemed a violation of natural justice. The counsel also presented reasonable cause for the delay in filing the return, citing pending wealth tax returns from earlier years as a contributing factor. 3. Upon hearing the arguments and reviewing the material presented, the Appellate Tribunal found that the successor WTO had failed to issue proper notices as required by law. The Tribunal concluded that the penalty order was void due to the violation of natural justice principles. Citing decisions from the Calcutta High Court and Allahabad High Court, the Tribunal set aside the order of the Commissioner of Wealth Tax (Appeals) and directed the WTO to delete the penalty. The Tribunal did not delve into the merits of the case, as the procedural irregularities were sufficient to render the penalty order legally invalid. 4. In the final decision, the appeal was allowed, and the penalty imposed under section 18(1)(A) of the Wealth Tax Act for the relevant assessment year was directed to be deleted by the WTO. The judgment underscored the importance of adhering to principles of natural justice in administrative proceedings and highlighted the consequences of failing to provide proper notice and opportunity to be heard to the concerned party.
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