1973 (7) TMI 13 - HC - Wealth-tax

Petitioner did not file his returns on the due dates, but he filed the same on 16th December, 1969, pursuant to notices issued to him under section 17(2) in respect of the first four assessment years and under section 14(2) for the assessment year 1968-69 - Whether the assessee s bona fide belief that wealth-tax would not be leviable if market value instead of 20 times the rent was considered forms a reasonable excuse for non-filing of return of wealth - since the assessee did not file the returns voluntarily, he is not entitled to the relief u/s 18(2A)

Summary

Issues:
1. Imposition of penalties under section 18 of the Wealth-tax Act for failure to file returns within the specified time.
2. Consideration of reasonable cause for belated filing of returns.
3. Invocation of relief under section 18(2A) of the Act.
4. Interpretation of section 18(1)(a) regarding penalty imposition.
5. Application of legal principles from previous judgments to penalty imposition.

Analysis:
The judgment involves a batch of five writ petitions by a common assessee under the Wealth-tax Act, challenging penalties imposed for late filing of returns for assessment years 1964-65 to 1968-69. The Wealth-tax Officer levied penalties ranging from Rs. 3,986 to Rs. 5,191, totaling Rs. 21,590, while the tax for the same years amounted to Rs. 2,570. The petitioner contended that the belated returns were not without reasonable cause and sought relief under section 18(2A) of the Act. The Commissioner rejected these contentions, leading to the writ petitions under Article 226 of the Constitution.

Regarding relief under section 18(2A), the Commissioner's refusal was found to be based on an erroneous understanding of the law. The court clarified that the power under this sub-section could be invoked either before or after the imposition of penalties. However, as the petitioner did not meet the conditions for relief, the court did not direct the Commissioner to reconsider the exercise of this power.

The court analyzed the scope of section 18(1)(a) of the Act, emphasizing that penalties should be imposed only if the assessee failed to file returns without reasonable cause. Referring to legal principles established in previous judgments, the court highlighted that penalties should not be imposed for technical or venial breaches, but for deliberate defiance or contumacious conduct. The court found that the Commissioner failed to consider the circumstances presented by the petitioner to show that the late filing was not without reasonable cause, thereby quashing the Commissioner's order and directing a rehearing of the revision petition.

In conclusion, the court allowed the writ petitions, quashed the impugned order of the Commissioner, and directed a re-hearing of the revision petition in light of the judgment. No costs were awarded in this matter.