9911796707
TMI Blog2006 (2) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in sustaining the action of the first appellate authority in approving the levy of penalty under section 18(1)(c) of the Act? 3. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in confirming the action of the lower authorities in invoking Explanation 4 to section 18(1)(c) of the Act?" The facts relating to the above questions of law are as under: The assessee is a company in which the public are not substantially interested. It was in possession of assets specified in section 40(3) of the Finance Act, 1983, thereby rendering it liable to wealth-tax. A notice under section 17 was issued on April 17, 1981. Since t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er rejected the explanation and levied the penalty under section 18(1)(a) of the Act. Aggrieved by this order, the assessee filed an appeal to the Commissioner of Wealth-tax (Appeals). The Commissioner of Wealth-tax (Appeals) confirmed the order of the Assessing Officer, levied penalty and dismissed the appeal filed by the assessee. Aggrieved by the same, the assessee filed an appeal to the Income-tax Appellate Tribunal and the Tribunal held that there was no reasonable cause for the delay in filing the returns and refused to interfere. In respect of levy of penalty under section 18(1)(c) of the Act, the plea of the assessee was that, the assessee had a bona fide impression that the value of the property was exempt from levy of wealth-tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. The Assessing Officer issued notice under section 17 of the Wealth-tax Act and as there was no compliance, the Assessing Officer proceeded to issue notices under section 16(4) of the Wealth-tax Act. Thereafter, the assessee filed "nil" returns of wealth. Assessments were completed bringing to tax the value of property held by the assessee at Injambakkam. The assessee-company claimed that it was under a bona fide impression that the value of the land is exempt from levy of wealth-tax and it was submitted that as soon as the assessee came to know it was leviable, returns were filed. Even after receiving the notice under section 17 for the assessment year under consideration, the appellant did not bother to file the returns or even for appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the provisions of section 40(3) of the Finance Act of 1983, it can be said that a patently wrong reading of the section cannot be camouflaged in terms of a bona fide mistake. It is therefore clear that the assessee had a taxable asset. In terms of Explanation 4 to section 18(1)(c) the assessee was deemed to have furnished inaccurate particulars. Furthermore, the assessee was not able to substantiate its contention that its belief in the non-assessability of non-agricultural land was a bona fide mistake. The findings recorded by the Tribunal are therefore based on the material and evidence on record and do not suffer from any legal infirmity. In view of the foregoing conclusions, we answer the questions referred to above in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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