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TMI Blog2018 (3) TMI 1471X X X X Extracts X X X X X X X X Extracts X X X X ..... erest u/s 17B in respect of the period between the due date and the date of the notice u/s 17 of the Act. - T.C.A.Nos.857 & 858 of 2017 C.M.P.Nos.21291 of 2017 - - - Dated:- 20-2-2018 - S. Manikumar And V. Bhavani Subbaroyan, JJ. For the Appellant : Mr.M.P.Senthil Kumar For the Respondent : Mr.T.R.Senthil Kumar JUDGMENT ( Judgement of the Court was made by S. Manikumar, J. ) Instant tax appeals are filed by the assessee against the common order of the Income Tax Appellate Tribunal 'A' Bench, Chennai (in short, the Tribunal ) dated 20.12.2012, passed in W.T.A.No.18/Mds/2017 W.T.A.No.19/Mds/2017, pertaining to the Assessment Years 2007-08 and 2008-09. 2. When these appeals came up for admission today (20.02.2018), Mr.T.R.Senthil Kumar, learned counsel accepted notice on behalf of the Revenue. With consent of the learned counsel on either side, instant tax appeals are taken up for final disposal. 3. Since common issues are involved in both these tax appeals, they were heard together and disposed of by means of this common judgement. 4. Short facts leading to filing of these appeals, are as follows: (i) The appellant/assessee, is an indivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s due date u/s 14(1) and not the due date u/s 17. Hence, the assessee is liable to pay interest u/s 17B(1) from the due date u/s 14(1) to the date of filing of return u/s 17. Accordingly, interest u/s 17B(1) is recalculated.... 5. Aggrieved by levy of interest, under Section 17B(1) of the Act, in the order of assessment under Section 16(3) r/w Section 17 of the Act, dated 30.01.2015, the assessee preferred appeals before the Commissioner of Wealth Tax (Appeals)-18, Chennai 600 034. 6. The Commissioner of Wealth Tax (Appeals)-18, Chennai 600 034, relied on a decision, in the case of ITO Vs. Amar Chand Boarad in ITA No.425 (JODH) of 2009, wherein, it was held that if any assessment is made for the first time under Section 147, then the assessee cannot be made liable to pay interest for the period during which it was not possible on the part of the assessee to file return, i.e., after one year from the end of the assessment year till issuance of notice under Section 148. Following the said decision, vide order dated 10.01.2017, the Commissioner of Wealth Tax (Appeals) -18, Chennai, allowed the appeals filed by the assessee and held as follows: As the facts of the instant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010-11 2011-12, it is noticed that the assessee has filed his return of income within the due date. The Revenue has not been able to dispute this fact. Even considering the submission of the Ld.DR that the return was not before the AO, the same would not stand, in so far as, that is not the ground raised by the Revenue. In these circumstances, respectfully following the decision of Co-ordinate Bench of this Tribunal in the case of Smt.M.R. Prabhavathy v. ACIT referred to supra, the order of the Ld.CIT(A) for the AYs 2009-10, 2010-11 2011-12 stands confirmed. 9. In the result, appeals of the Revenue in WTA Nos.20, 21 22 stands dismissed. 10. Cross-Objections filed by the assessee are in support of the order of the Ld.CIT(A). We have already reversed the order of the Ld.CIT(A) for the AYs 2007-08 2008-09 and confirmed the order of the Ld.CIT(A) for the AYs 2009-10, 2010-11 2011-12. In these circumstances, Cross Objections filed by the assessee are infructuous and consequently dismissed as infructuous. 11. In the result, WTA Nos.18 19/Mds/2017 stands allowed and WTA Nos.20 to 22/Mds/2017 stands dismissed and CO Nos.68 to 72/Mds/2017 stands dismissed as in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee could not file his returns of income in the absence of statutory provision for filing of the same beyond the due date under Section 15 of the Act. (vi) That the Tribunal has erred in confirming the levy of interest for the period between the due date under Section 14(1) of the Act and the date of notice under Section 17 of the Act when there is admittedly no statutory provision for the same. (vii) That the Tribunal ought to have considered that the assessee could not be held liable for the non-performance of an act which is not specifically prescribed under the provisions of the Act, which is beyond his control and prayed for quashing the order of the Tribunal. 11. The learned counsel for the Revenue, justifying the order of Tribunal, inter alia, stated as follows: (i) The Tribunal was right in holding that filing of return of wealth is mandatory duty on the assessee once the net worth exceeds the prescribed limit. (ii) The Tribunal was right in holding that just because, the due date for filing of the wealth tax returns expired and the assessee had not filed his return within the due date, it cannot be said that the assessee is exempted fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.02.2014) and the amount of interest payable at ₹ 12,39,879/-. 17. On an appeal filed by the assessee, following the decisions made under the Income Tax Act in ITO Vs. Amar Chand Boarad in IT Appeal No.425 (Jodh.) of 2009 and Ms.Priti Pithawala Vs. ITO reported in 2003 129 Taxman 79 (Mum.) (Mag.) the Commissioner of Wealth Tax (Appeals), allowed the appeal and held that if any assessment is made for the first time under Section 147 of the Income Tax Act, then the assessee cannot be made liable to pay interest for the period during which it was not possible on the part of the assessee to file return, i.e. after one year from the end of the assessment year till issuance of notice under Section 148 of the Income Tax Act and directed the Assessing Officer to recalculate interest. 18. Before the Tribunal, the contention of the Revenue was that the provision for levy of interest u/s 17B(1) of the Act provided vide Explanations to the said Section are very clear that, in case the assessment is being made for the first time, then, such assessment, has to be treated, as a regular assessment and thus, the interest has to be levied from the due date u/s 14(1) of the Act and not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 17B Interest for defaults in furnishing return of net wealth , of the Wealth Tax Act, 1957, are extracted hereunder: 2(m) net wealth means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date which have been incurred in relation to the said assets. *** 2(ob) regular assessment means the assessment made under sub-section (3) or sub-section (5) of section 16. *** 2(q) valuation date , in relation to any year for which an assessment is to be made under this Act, means the last day of the previous year as defined in section 3 of the Income-tax Act if an assessment were to be made under that Act for that year: Provided that? [***] (ii) in the case of a person who is not an assessee within the meaning of the Income-tax Act, the valuation date for the purposes of this Act shall be the 31st day of March immediately preceding the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st day of March, 1991, or before the completion of the assessment, whichever is earlier. *** 16. Assessment. (1) Where a return has been made under section 14 or section 15 or in response to a notice under clause (i) of sub-section (4), (i) if any tax or interest is found due on the basis of such return, after adjustment of any amount paid by way of tax or interest, then, without prejudice to the provisions of sub-section (2), an intimation shall be sent to the assessee specifying the sum so payable and such intimation shall be deemed to be a notice of demand issued under section 30 and all the provisions of this Act shall apply accordingly; and (ii) if any refund is due on the basis of such return, it shall be granted to the assessee and an intimation to this effect shall be sent to the assessee: Provided that except as otherwise provided in this sub-section, the acknowledgement of the return shall be deemed to be intimation under this sub-section where either no sum is payable by the assessee or no refund is due to him: Provided further that no intimation under this sub-section shall be sent after the expiry of two years from the end of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice issued under sub-section (2) or sub-section (4), the Assessing Officer, after taking into account, all relevant material which he has gathered, shall, after giving such person an opportunity of being heard, estimate the net wealth to the best of his judgment and determine the sum payable by the person on the basis of such assessment: Provided that such opportunity shall be given by the Assessing Officer by serving a notice calling upon the person to show cause, on a date and time to be specified in the notice, why the assessment should not be completed to the best of his judgment: Provided further that it shall not be necessary to give such opportunity in a case where a notice under sub-section (4) has been issued prior to the making of the assessment under this sub-section. (6) Where a regular assessment under sub-section (3) or sub-section (5) is made? (a) any tax or interest paid by the assessee under sub-section (1) shall be deemed to have been paid towards such regular assessment. (b) if no refund is due on regular assessment or the amount refunded under sub-section (1) exceeds the amount refundable on regular assessment, the whole or the excess amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x and has escaped assessment. Explanation: Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. (1A) No notice under sub-section (1) shall be issued for the relevant assessment year, (a) if four years have elapsed from the end of the relevant assessment year unless the case falls under clause (b); (b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the net wealth chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees ten lakh or more for that year. Explanation. For the purposes of sub-section (1) and sub-section (1A), the following shall also be deemed to be cases where net wealth chargeable to tax has escaped assessment, namely: (a) where no return of net wealth has been furnished by the assessee although his net wealth or the net wealth of any other person in respect of which he is assessable under this Act on the valuation date exceeded the maxim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17B Interest for defaults in furnishing return of net wealth. (1) Where the return of net wealth for any assessment year under sub-section (1) of section 14 or section 15, or in response to a notice under clause (i) of sub-section (4) of section 16, is furnished after the due date, or is not furnished, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commencing on the date immediately following the due date, and, (a) where the return is furnished after the due date, ending on the date of furnishing of the return, or (b) where no return has been furnished, ending on the date of completion of the assessment under sub-section (5) of section 16, on the amount of tax payable on the net wealth as determined under sub-section (1) of section 16 or on regular assessment. Explanation 1. In this section, due date means the date specified in sub- section (1) of section 14 as applicable in the case of the assessee. Explanation 2. In this sub-section, tax payable on the net wealth as determined under sub-section (1) of section 16 shall not include the additional wealth-tax, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and such notice of demand shall be deemed to be a notice under section 30 and the provisions of this Act shall apply accordingly, and (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded. (5) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years. (emphasis added) 24. A perusal of the above provisions of the Wealth Tax Act, shows that interest under Section 17B is attracted in a case where the return of net wealth is furnished after the due date or where no such return is filed before the completion of the assessment. 25. In the case on hand, the assessee has filed the return of net wealth on 19.02.2014, as against the due date of 01.10.2007, for the assessment year 2007-08 and for the assessment year 2008-09 return of net wealth has been filed on 19.02.2014, as against the due date of 01.10.2008. Thus, apparently, there is a delay in filing the return. 26. Since these assessments were made for the first time, they are regular assessment made under the Act. Therefore, we have to proceed that a regular asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return on the part of the assessee, for which a due date has been prescribed. (ii) Section 15 deals with a case where the assessee wants to file a return where he has not furnished a return under Section 14(1) or 16(4) or where he wants to file a revised return when the earlier return is found to have any omission or mistake. (iii) Section 16(4)(i) comes into play when the Assessing Officer calls upon the person to file a return of wealth when there is an omission to file the return under Section 14(1). (iv) Section 17 deals with a case of reopening of assessment in case of escapement of net wealth for assessment or a fresh assessment for an assessment year for which the normal time for assessment has elapsed. (v) Section 17 inter alia provides that the provisions of the Wealth Tax Act, 1957 shall, so far as may be, apply as if the return filed under the section were a return required to be furnished under Section 14. (vi) Explanation 3 under Section 17B(1) makes it very clear that where in relation to an assessment year an assessment is made for the first time under Section 17, the assessment so made shall be regarded as a regular assessment for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a result of an order of reassessment or recomputation under Section 147 or Section 153-A, the amount on which interest was payable under sub-section (1) is increased, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commencing on the day following the date of determination of total income under sub-section (1) of Section 143 and where a regular assessment is made as is referred to in sub-section (1) following the date of such regular assessment and ending on the date of the reassessment or recomputation under Section 147 or Section 153-A, on the amount by which the tax on the total income determined on the basis of the reassessment or recomputation exceeds the tax on the total income determined under sub-section (1) of Section 143 or on the basis of the regular assessment aforesaid. (4) ..... (5) ..... 6. Going by the clear wording of the Section and the admitted fact position that the assessment is a regular assessment and not a reassessment, we have no hesitation in confirming the order of the Tribunal, thereby dismissing the Tax Case Appeal. In the result, the Tax Case App ..... X X X X Extracts X X X X X X X X Extracts X X X X
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