1982 (7) TMI 172 - AT - Wealth-tax

Summary

Issues:
1. Penalty imposed for late filing of wealth-tax return for assessment years 1970-71 and 1971-72.
2. Interpretation of section 18(1)(a) regarding reasonable cause for delay in filing the return.
3. Application of Circular No. 78 by CBDT regarding extension of time for filing returns.

For the assessment year 1970-71, the Wealth-tax return was filed late, leading to a penalty of Rs. 740 imposed under section 18(1)(a). The assessee argued that his pre-occupation with a new business venture and the CBDT circular extending the time limit justified the delay. The AAC upheld the penalty, but the ITAT Jaipur found in favor of the assessee. The ITAT emphasized the need to consider reasonable cause for the delay and clarified that the CBDT circular did not restrict the extension to only those with taxable agricultural holdings. Consequently, the penalty was canceled for the assessment year 1970-71.

In the case of the assessment year 1971-72, a penalty of Rs. 9,893 was imposed for late filing of the wealth-tax return. The assessee claimed the return was filed on 31st December, 1971, not on 19th January, 1974 as assumed by the WTO. The ITAT noted discrepancies in the filing dates and the erroneous basis for calculating the delay. As the penalty was based on incorrect information and no substantial delay was proven, the ITAT overturned the penalty for the assessment year 1971-72. The ITAT did not address other arguments raised by the assessee, as the penalty was canceled based on the filing date discrepancy.

In conclusion, the ITAT Jaipur allowed the assessee's appeals for both assessment years, emphasizing the importance of considering reasonable cause for delays in filing returns and ensuring accurate interpretation of filing dates to levy penalties under section 18(1)(a).