1979 (7) TMI 163 - AT - Wealth-tax

Summary

Issues:
Late submission of wealth-tax returns leading to penalty proceedings. Lack of reasonable opportunity of being heard before imposing penalties.

Analysis:
The judgment by the Appellate Tribunal ITAT Patna-A involved appeals by the same assessee regarding wealth-tax returns for the assessment years 1968-69, 1969-70, and 1970-71, which were filed late on 29th October 1970 despite being due on 30th June of the respective years. Penalty proceedings were initiated against the assessee for the delayed submission of returns. A show-cause notice was issued by one WTO, but penalties were imposed by another WTO after a significant delay. The penalties amounted to Rs. 481, Rs. 14,399, and Rs. 4,185 for the respective assessment years.

The assessee appealed the penalty orders, arguing that no reasonable opportunity of being heard was given before the penalties were imposed. The representative contended that the delay in filing returns was unintentional due to the geographical separation of the assessee and counsel, along with the complexity of the case. It was emphasized that the penalties were disproportionate to the tax payable. On the other hand, the Department justified the penalties citing the absence of an explanation for the delay.

The Tribunal found in favor of the assessee, ruling that the penalties imposed by the second WTO were invalid due to the lack of a real opportunity of being heard. Despite a show-cause notice issued earlier, the subsequent WTO did not provide a fresh hearing opportunity before imposing penalties. The Tribunal highlighted that a genuine opportunity of being heard is essential under the law and not merely a formality. As a result, the penalties were canceled, and the appeals of the assessee were allowed.

In conclusion, the judgment addressed the issue of late submission of wealth-tax returns leading to penalty proceedings and the crucial aspect of providing a reasonable opportunity of being heard before imposing penalties. The Tribunal emphasized the significance of a genuine opportunity for the assessee to present their case, ultimately leading to the cancellation of the penalties in this particular case.