1987 (9) TMI 108 - AT - Wealth-tax

Summary

Issues:
1. Imposition of penalty for non-payment of self-assessment tax for the assessment year 1978-79.
2. Appeal against the penalty imposition by the revenue.
3. Consideration of lack of liquid resources as a reasonable cause for non-payment of tax.
4. Comparison with previous wealth-tax arrears liquidation efforts to determine reasonableness of lack of liquid resources claim.
5. Application of legal principles regarding venial or technical default in penalty imposition.

Detailed Analysis:

Issue 1: The appeal by the revenue pertains to the imposition of a penalty for the non-payment of self-assessment tax for the assessment year 1978-79. The assessee had not paid the self-assessment tax of Rs. 13,296 despite filing the return on 31-3-1979. The Wealth Tax Officer (WTO) imposed a penalty of Rs. 12,498 at a rate of 2% per month for 47 months due to the non-payment.

Issue 2: The assessee appealed against the penalty and argued before the Commissioner (Appeals) that the lack of liquid resources and difficult financial situation led to the failure to pay the self-assessment tax. The Commissioner (Appeals) considered the installment facility allowed for earlier years due to the bleak liquidity position of the assessee and canceled the penalty, citing reasonable cause under section 15B.

Issue 3: The revenue appealed the Commissioner's decision, contending that the non-payment of self-assessment tax, even after several years, warranted the restoration of the penalty. The assessee's counsel highlighted efforts to liquidate wealth-tax arrears from 1982 to 1985, emphasizing the lack of liquid resources and financial constraints as reasons for the non-payment.

Issue 4: The Tribunal analyzed the wealth-tax arrears liquidation efforts of the assessee from 1982 to 1985, amounting to Rs. 1,45,000, to assess the reasonableness of the lack of liquid resources claim. Despite a default in paying the self-assessment tax, the Tribunal noted the conscious efforts made by the assessee to raise resources and clear arrear demands, indicating a lack of liquid resources rather than willful default.

Issue 5: Referring to legal principles, including the observation in Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26, the Tribunal considered whether the default in paying the self-assessment tax was venial or technical. Given the efforts to liquidate arrear demands and the lack of liquid resources, the Tribunal upheld the Commissioner's decision, dismissing the revenue's appeal and emphasizing the reasonableness of the lack of liquid resources claim.

The Tribunal's decision was based on a thorough analysis of the facts presented, including the history of arrear payments, lack of liquid resources, and efforts made by the assessee to address financial constraints, ultimately leading to the dismissal of the revenue's appeal against the penalty imposition.