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TMI Blog1982 (5) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... position of penalty for delayed submission of returns for the respective years ? " These 18 cases relate to three persons, Chiranjilal Agarwala, the father, and the two sons being Rajkishore Agarwala and Sanwarmal Agarwala. Six assessment years are involved being 1964-65, 1965-66, 1966-67, 1967-68, 1968-69 and 1969-70. The parties were assessees under the I.T. Act for several years past. Returns under the W.T. Act for the aforesaid years were, however, not filed until 18th of March, 1972. Before any notice under s. 14(2) of the Act had been issued, voluntary returns for all these six years by all the three assessees were filed before the WTO. The WTO initiated penalty proceedings for delayed submission of returns. The returns were substan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operation in satisfying demands were exhibited. The AAC did not accept these explanations. He, however, reduced the penalty for all the assessment years in question. Assessees appealed to the Tribunal. By a common judgment dated March 22, 1976, the Appellate Tribunal set aside the orders of the AAC by directing: " ... It has been held by the. Orissa High Court in the case of Ketini Krishnamurthy [1976] 103 ITR 487 (Orissa), that in view of uncertainty of law before the Full Bench decision in the case of Gangaram Chapolia [1976] 103 ITR 613 (Orissa), the assessees might have been deprived of adequate opportunity to present their case, when they were disposed of before the Full Bench judgment, by proceeding as if the entire burden was on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia, it was stated: "(1) That my father Sri Chiranjilal Agarwal is a wealth-tax assessee and his age is about 62 years. He has been lying ill with various ailments ever since 1964 and is ill even today. He is so ill and bed-ridden that he is not in a position to move from the bed and to come and appear for an affidavit. I have taken full instructions from him and I am swearing this affidavit on such instructions believing this fact to be true as instructed by him. (2) That my father was continuously ill from 1964 and was under treatment of Dr. K. C. Sahu, Dr. Tajeswar Rao, Dr. B. D. Agarwal of Calcutta, Dr. G. Arjun Das of Madras and Dr. S. L. Bajoria. (3) That my father has been under treatment and taking medicines ever since 1964 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 487 (Orissa). The assessees' consultation with their lawyers has not been disputed. The Appellate Assistant Commissioner himself has observed that penalties imposed under the Wealthtax Act were expropriatory. In our opinion, these penalties are certainly very heavy. But the fact remains that the assessees were new to wealth-tax proceedings. They were diligently filing the income-tax returns within due time. They took steps to consult experts regarding Wealth-tax matters. The returns for all the years were filed on the same date voluntarily. Taking all the circumstances into 'consideration, we are inclined to hold that the assessees could have entertained an honest belief that no penal liability is, incurred if the returns were filed be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llness claimed to be serious, necessitated consultation with experts in Calcutta and Madras. The illness of the father (karta) of the two other assessees is certainly a justifying factor. The facts that advice was taken from two lawyers has also been asserted in the affidavits and there has been no dispute. The WTO did not choose to examine the advocates with a view to discrediting the affidavits. In fact, Mr. B. K. Mahanti, whose advice is said to have been taken, now appearing for the assessees, affirmed before us that such advice had been given on account of the confused state of the law. Parties were income-tax assessees from before but they were new to the W.T. Act. In fact, these were the very first returns to be filed. Taking a sum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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