1979 (6) TMI 101 - AT - Wealth-tax

Summary

Issues:
- Appeals against the cancellation of penalties under s. 18(1)(a) of the WT Act, 1957 by the AAC for the asst. yrs. 1967-68 to 1973-74.

Detailed Analysis:

1. The appeals were filed by the Revenue against the order of the AAC canceling penalties levied by the WTO under s. 18(1)(a) of the Wealth Tax Act, 1957, for the assessment years 1967-68 to 1973-74. The WTO had imposed penalties due to delays in filing wealth tax returns by the assessee. The AAC, in a speaking order, referred to the principles laid down by the Madras High Court and found that the assessee had reasonable cause for the delay, subsequently canceling the penalties for all years.

2. The assessee voluntarily filed wealth tax returns without any notice from the Department. The assessee explained the delay in filing the returns by citing various reasons, including family tragedies and business commitments. The AAC accepted these explanations, noting the genuine reasons for the delay. The assessee's father's illness, son's death due to cancer, and the establishment of a company were considered valid reasons for the delay in filing the returns.

3. The appellate tribunal upheld the AAC's decision, emphasizing that the reasons provided by the assessee were genuine and justified. The tribunal considered the small wealth tax amounts compared to the substantial penalties imposed, indicating no motive for withholding taxes. The tribunal also highlighted that the returns were filed promptly after being advised by auditors about potential wealth tax liability, further supporting the assessee's position.

4. Additionally, the tribunal addressed the quantum of penalties, noting that they exceeded the limits authorized by law at the time the returns were due. Despite this, the tribunal upheld the cancellation of penalties based on the reasonable cause for the delay in filing the returns, as established by the AAC's order.

5. In conclusion, the appeals filed by the Revenue were dismissed, affirming the AAC's decision to cancel the penalties. The tribunal found that the assessee had valid reasons for the delay in filing wealth tax returns, thereby justifying the cancellation of penalties under s. 18(1)(a) of the Wealth Tax Act, 1957.