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TMI Blog1985 (4) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn and no proceedings under section 17 were initiated. Proceedings under section 17 were initiated for the three assessment years 1970-71 to 1972-73. For the assessment years 1973-74 to 1975-76 again there was no return filed by the assessee and no proceedings initiated under section 17. For 1976-77 a return was filed for Rs. 33,715 and it was assessed at Rs. 2,10,000 after appeal. In the appeal, the only point that was allowed was the liability due to the sons of the tune of Rs. 1,85,000. Again from the assessment year 1977-78 onwards the assessee did not file any return. 3. Mr. Ranka submitted that as per the department the notice under section 17 was claimed to have been served on 8-2-1979. As per this notice the return should have been filed by 8-3-1979. The assessee did not file any return as the notice was served on the assessee. The assessment was completed ex parte under section 16(5) of the Act on 26-11-1979 on a total wealth of Rs. 4 lakhs. 4. If the assessee was liable to wealth-tax, the assessee normally should have filed the wealth-tax return by 30-9-1970. According to the department the period of default works out to 109 months, i.e., the period starting from 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 Mr. Ranka, therefore, submitted by referring to the order of penalty that in spite of these facts the penalty has been imposed by rejecting the arguments and submissions of the assessee. The WTO has considered the submission as an excuse of the assessee. He further states that a number of notices were served on the assessee. He, therefore, concluded that there was a conscious disregard of his obligation as he has failed to respond to the various notices. The WTO further states that there is no evidence in regard to the illness of the assessee and thereby he imposed penalty of 109 months. 6. In appeal, the Commissioner had upheld the order of the WTO on the ground that assessment for the assessment year 1971-72 was concluded in October 1973 and the wealth was estimated at Rs. 8 lakhs. The assessee had taken up the matter in appeal and the wealth was reduced to Rs. 4 lakhs. According to the Commissioner the notice under section 14(2) of the Act which was served on the assessee for the assessment year 1972-73 should have given an indication to the assessee that he was obligated to file the return for 1970-71 as well. According to the Commissioner, the notices for the assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent accepts the fact that the assessee has not added anything to his wealth, and in fact the wealth has decreased due to lot of expenditure on his medical treatment. Further, the department is also aware of the fact that the privy purse granted by the Government is just Rs. 1,20,000 per annum with which the assessee had to maintain his large family and his other old properties. The department was also aware that the assessee had gifted certain properties in the earlier years itself but in the ex parte assessment the same was included. The department is also aware that these very properties have been excluded in the subsequent years. The value of such properties is to the tune of Rs. 2 lakhs, the figure at which they have been assessed in the assessee's hands. The assessee had a liability owing to his sons to the tune of Rs. 1,85,000. If this is also excluded then the wealth would be very much below taxable limit of Rs. 1 lakh. It is, therefore, clearly established the fact that bonafide belief was based on facts and is not merely a submission for the sake of submission and cannot be said to be an excuse as has been held by the learned AAC. 9. Mr. Ranka relied on Smt. Indu Barua's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -71. 11. Mr. Ruhela, therefore, submitted that it would be wrong on the part of the assessee that he was not aware of his obligations and even his bonafide belief is an excuse on the ground that the assessment for 1971-72 was completed on 19-10-1973 at a figure of Rs. 8 lakhs which was reduced in appeal to Rs. 4 lakhs. Even assessment for 1971-72 was concluded at a figure of Rs. 4,95,000. The assessment for the year under review was completed at Rs. 4 lakhs against which the assessee did not file any appeal. According to Mr. Ruhela, it clearly established the fact that the assessee was made aware that his wealth is in the range of Rs. 4 lakhs which is very much above the minimum taxable limit. This clearly establishes that the assessee was in obligation to file the return. 11.1 Mr. Ruhela further submitted that the obligation to file the return is further fortified by the fact that the assessee's sons had written off the amounts due from their father, i.e., the assessee which was in the range of Rs. 1,85,000. The assessee cannot be said to be not aware that there is no liability at all to the sons from 1970-71 onwards. Mr. Ruhela referred to the order for 1971-72 which is at pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n filed as wealth was below taxable limit. No notice was to issued by the Wealth-tax Officer as he was satisfied that there was 1969-70 no taxable wealth. No assessment was framed. 1970-71 ----- 4,00,000 1,500" ---------------------------------------------------------------------------------------- We also reproduce the chart which is filed at page 51 which gives the position from 1971-72 onwards: ---------------------------------------------------------------------------------------- Assessment Wealth returned Wealth assessed after appeal, Wealth-tax year if any Rs. Rs. Rs. ---------------------------------------------------------------------------------------- "1971-72 ---- 4,00,000 4,000 1972-73 ---- 4,95,000 4,950 1973-74 No return filed as wealth was below taxable limit. No notice was to issued by the Wealth-tax Officer as he was satisfie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is necessary to be established. In the instant case the facts of the assessee are identical in nature with the cases before the Allahabad High Court and the Gauhati High Court. Similarly, is that the assessee did not file any return on the basis of his past experience of certain liabilities being held as allowable and allowed and as also the assessed value of certain other properties. The assessee was under a bona fide belief that he was liable to pay the amount that is owing by him to his sons. It is totally irrelevant that the recipient, i.e., sons have written off the amount as not recoverable on the ground of the financial position of the assessee. In respect of a debt declared to be free, the agreement must be from the creditor as well as from the debtor. The fact, that the creditor, i.e., the assessee has owed debt and goes to indicate the intention of the assessee that it is a debt as far as he is concerned. This debt having been allowed to him in the past, the assessee's belief that it would be allowed even for the year under review is fully justified. Similar is the case in respect of valuation of the forest land measuring 4,000 acres. The assessee was under a be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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