1992 (1) TMI 196 - AT - Wealth-tax

Summary

Issues:
- Whether penalties levied under section 18(1)(a) of the W.T. Act for non-filing of wealth tax returns are justified.
- Whether the Amnesty Scheme as introduced by the C.B.D.T. applies to the case and justifies the cancellation of penalties.

Analysis:
1. The appeals by the revenue challenged the cancellation of penalties under section 18(1)(a) of the W.T. Act for the assessment years 1976-77 to 1982-83. The assessee failed to file wealth tax returns despite notices under section 17 and non-compliance with notices under section 16, leading to ex parte assessments by the WTO. The assessee later filed returns under the Amnesty Scheme, claiming immunity from penalties based on Circulars of the C.B.D.T. The CWT (Appeals) canceled the penalties, citing compliance with the Amnesty Scheme and Circulars.

2. The revenue contended that the Amnesty Scheme applied only to cases not detected by the department before returns were filed. The WTO had already assessed the wealth before the returns were filed, making the Amnesty Scheme inapplicable. The assessee argued that the Scheme allowed defaulting assesses to come forward and disclose true wealth without penalties, regardless of past actions. The ITAT found merit in the assessee's arguments, emphasizing that the Amnesty Scheme aimed to encourage defaulting assesses to pay tax and rectify past defaults without penalties.

3. The ITAT analyzed the Circular of the C.B.D.T. related to the Amnesty Scheme, noting that it allowed disclosures of wealth even in cases where assessments were set aside on appeal or pending reassessments. The Scheme aimed to provide immunity from penalties and prosecution for voluntary disclosures of wealth. The ITAT concluded that the assessee's case fell within the scope of the Amnesty Scheme, and penalties under section 18(1)(a) of the W.T. Act should not be imposed. The ITAT upheld the order of the CWT (Appeals) canceling the penalties, dismissing the revenue's appeals.