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TMI Blog1995 (1) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... )(a) of the Wealth-tax Act, 1957 ? " The brief facts of the case are that the assessment of the assessee was completed ex parte on September 27, 1977, and penalty proceedings for late filing of the return were also initiated simultaneously. The return was filed on August 28, 1972, which was required to be filed on July 31, 1972, and as such notices were given to provide opportunity to the assessee as to why the penalty be not imposed. No reply was filed and the Wealth-tax Officer found that the assessee has committed default without any cogent reason and a penalty of Rs. 25,485 was imposed. Against the order of the Wealth-tax Officer, an appeal was preferred to the Appellate Assistant Commissioner of Income-tax, Kota Range, Kota, and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x and if there is liability of tax, penalty could be levied for any default in not making the payment of such tax or other matters relating thereto. Reliance has been placed on the decision of the Madras High Court in the case of CGT v. C. Muthukumaraswamy Mudaliar [1975] 98 ITR 540. We have gone through that judgment and the principle enunciated by the Madras High Court is that the amendment in the Act would not be applicable to the defaults committed before the amendment came into force and the law applicable to the levy of penalty is such as it stood at the time when the default was committed and not as it stood when the assessment was made nor the law as it stood when the penalty proceedings were initiated or the penalty was imposed. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in the case of S. A. Raju Chettiar v. Collector of Madras [1956] 29 ITR 241 (Mad). This was a matter with regard to the penalty under section 28 of the Income-tax Act. The Madras High Court came to the conclusion that the family must be in existence when the proceedings were initiated and it must also be in existence on the date the order is passed. Similarly, in the case of P. S. Kandaswamy Mudaliar v. CIT [1969] 72 ITR 212 (Mad), it was held that the levy of penalties on the family after disruption was not valid. The Full Bench of the Allahabad High Court in the case of CIT v. Nathimal Gaya Lal [1973] 89 ITR 190 has held that before an order of penalty can be sustained, the assessable entity on which the penalty is being imposed must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and section 17A contains the provisions in respect of the time-limit for completion of assessment and reassessment. The provisions of section 17B were inserted by the Direct Tax Laws (Amendment) Act, 1987, with effect from April 1, 1989, for charging interest for default in furnishing a return of net wealth. This provision was not in existence during the relevant period and, therefore, has no application. It is only section 18 where the penalty provisions are contained for default in submission of returns. The provisions of section 18(1)(a) read as under : " 18. Penalty for failure to furnish returns, to comply with notices and concealment of assets, etc. -- (1) If the Wealth-tax Officer, Appellate Assistant Commissioner, Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or groups of members in definite portions, he shall record an order to that effect and shall make assessment on the net wealth of the undivided family as such for the assessment year or years, including the year relevant to the previous year in which the partition has taken place, if the partition has taken place on the last day of the previous year and each member or group of members shall be liable jointly and severally for the tax assessed on the net wealth of the joint family as such. (2) Where the Assessing Officer is not so satisfied, he may, by order, declare that such family shall be deemed for the purposes of this Act to continue to be a Hindu undivided family liable to be assessed as such. " Section 20A refers to the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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