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TMI Blog2016 (6) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... s not sustainable in law. The same is, therefore quashed, accordingly grounds raised by the assessee are allowed. - Decided in favour of assessee - W. T. A No. 44/Kol/2013 - - - Dated:- 8-6-2016 - Shri Waseem Ahmed, Accountant Member And Shri S.S. Viswanethra Ravi, Judicial Member For the Appellant : Shri S.K. Tulsiyan, Advocate, Ld.AR For the Respondent : Shri Sallong Yaden, Addl. CIT, Ld. Sr.DR ORDER Shri S. S. Viswanethra Ravi, JM This appeal of the assessee is arising out of the order of the CIT(A),XXXVI, Kolkata in Appeal No. 95/CIT(A)-XXXVI/Kol/Wd.- 56(4)/2010-11/1387 dated 30-09-2013 for the assessment year 2006-07 against the order of penalty levied u/s. 18(1)( c) of the Wealth Tax Act, 1957 (hereinafter referred to as the Act ). 2. In this appeal, the assessee has raised the following grounds of appeal:- 1. For that in view of the facts and circumstances of the case the Ld. CWT(A) was wholly wrong and unjustified in confirming the penalty of ₹ 55,009/- arbitrarily imposed u/s 18(1)(c) of the W.T Act for the A.Y 2006-07 @ 100% of the W.Tax sought to be evaded for alleged concealment of wealth for not filing the W.T return voluntarily, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y 2006-07 on 31-3-2009 showing personal jewellery, ornaments and 50% share in M/s.Nopany Sons a partnership firm and motor car as his wealth. The AO accepted the said return and assessed the net wealth at ₹ 7000900/- u/s. 16(3)/17 of the W.T Act 1957 on 07-12-2009. Thereafter, the AO issued notice u/s. 18(1)( c) of the W.T Act to show cause why penalty should not be imposed for concealment of net wealth for not furnishing the wealth tax return voluntarily in time. In response to which, the assessee submitted to drop the penalty proceeding relying on some judicial decisions. After considering the same, the AO was of the view that the assessee has not filed the wealth tax return voluntarily in time and it is a fit case for imposition of penalty u/s. 18(1)( c) of the W.T Act 1957, accordingly, the AO imposed penalty @ 100% of ₹ 55,009/- against the assessee by stating as under:- Order u/s 16(3) of the WT Act 1957 was passed on 31.12.2009 computing net wealth at ₹ 7000900/-The Penalty proceedings u/s 18(l)(c) of the WT Act 1957 was initiated as the assessee sought to conceal the net wealth by not furnishing the return voluntarily and the return was filed in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d return resulting to avoid the payment of tax on the net value of wealth. Before the CWT(A) the assessee has relied on various case laws in support of his contentions. After considering the various submission of the assessee, the CWT(A) confirmed the penalty order of the AO by stating as under:- 3.7 The various case laws quoted by the appellant for arguing his contention that no penalty needs to imposed is perused. Most of the case laws are in the context of Central Sales tax, where the provisions are entirely different. Further none of these decisions are for the period 01.04.1989 onwards when the explanation 3 to the provisions of section 18(1)( c) was added. In the decision of Commissioner of Wealth-tax vs Yadu Raj Narain Singh [2006] 286 ITR 564 (All.), cited by the appellant, supports the A.O's case, as the precise reason for which the relief was granted was that the Explanation 3 to section 18(1 )( c) was not attracted in that case, as the period for filing of return was prior to 01.04.89. Hon'ble Allahabad H.C. has held The assessee was assessed to wealth tax up to the assessment year 1976- 77. Thereafter he had not filed any return. The notice under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d grounds of appeal. The Ld. Counsel for the assessee submits that the assessee has been filling all the returns relating to income-tax and wealth tax for all the previous years in time. He also submits that the assessee is a senior citizen of 72 years old and he is dependent on others. He further submits that Mr. K.V. Singh who is the Authorised Representative of the assessee was ill during the period in which period the assessee was due for filing the return under the W.T Act. However, his return under the Income Tax Act 1961 was filed in time and it was assessed u/s. 143(3) of the Act without any adverse remarks. He could not file the W.T Return in time but for the reasons that the assessee being aged and for non availability of his AR. The Ld. Counsel for the assessee also submits that the assessee contacted Mr. K.V.Singh, AR after receiving the notice issued u/s. 17 of the W.T Act, and directed him to file the return immediately. Thereafter, Mr. K.V.Singh, AR of the assessee filed the return, which was accepted by the AO without any adverse inference. Further, he argued that the AO could not give any cogent reason for initiation of impugned penalty u/s. 18(1) ( c) of the W.T A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act 1957. Therefore, it is relevant to reproduce the Explanation-3 of section 18(1) of the W.T Act 1957 for better understanding. [Explanation 3.-Where any person [***] fails, without reasonable cause, to furnish within the period specified in sub-section (1) of section 17A, a return of his net wealth which he is required to furnish under section 14 in respect of any assessment year commencing on or after the 1st day of April, 1989, and until the expiry of the period aforesaid, no notice has been issued to him under clause (i) of sub-section (4) of section 16 or sub-section (1) of section 17 and the Assessing Officer or the Deputy Commissioner (Appeals) or the Commissioner (Appeals) is satisfied that in respect of such assessment year such person has assessable net wealth, then, such person shall, for the purposes of clause (c) of this sub-section, be deemed to have concealed the particulars of his assets or furnished inaccurate particulars of any assets or debts in respect of such assessment year, notwithstanding that such person furnishes a return of his net wealth at any time after the expiry of either of the periods aforesaid applicable to him in pursuance of a notice unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(c) of the Act. In the circumstances, the contention raised on behalf of the Revenue that non-fulfillment of the return of income per se amounts to concealment within the meaning of section 271(1)(c) of the Act, being contrary to the settled legal position, does not merit acceptance. 12. But the introduction of Explanation 3 to section 271(1) with effect from April 1, 1976, has changed the law on the point in certain cases. Explanation 3 provides that if a person, who has not hitherto been assessed to tax under the Incometax Act, 1961, does not file a return of income for an assessment year voluntarily within the normal period of limitation and no notice under section 142(1) or 148 is issued to him till the expiry of the said period, he will be treated to have concealed his income and penalty will be leviable on him accordingly if he is later found to have had taxable income in that year. Thus, for the purpose of falling within the purview of Explanation 3, firstly, a person should not have been previously assessed (that is, a new assessee) ; secondly, he should have failed without reasonable cause, to furnish his return of income for the assessment year 1989-90 or any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od specified under section 153(1) of the Act. In the circumstances, the third condition, namely, that no notice under section 142(1) or section 148 of the Act should have been issued within the period specified under subsection (1) of section 153 of the Act is clearly not satisfied. As discussed earlier, the conditions for the applicability of Explanation 3 to section 271(1) are cumulative and each of the conditions has to be established for the purpose of invoking the said provision. In the present case, all the conditions are not cumulatively satisfied. The failure on the part of the petitioner to furnish return of income within the specified period, therefore, cannot be deemed to be concealment within the meaning of Explanation 3 to section 271(1) of the Act. Page No : 0358 15. In the light of the aforesaid, it is apparent that the case of the petitioner does not fall within the ambit of Explanation 3 to section 271(1) of the Act and as such, no penalty could be levied on the petitioner under section 271(1)(c) of the Act for concealment of particulars of his income on the ground that the petitioner had failed to furnish return of income for the year under considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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