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TMI Blog1995 (10) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... urns of wealth for assessment years 1986-87 1987-88, in which this question arises for consideration were filed in the month of March 1991. The assessments were made by the Assessing Officer in the month of February/March 1992. 4.1 The learned authorised representative of the assessee submitted that the assessments for these years were clearly barred by limitation of time. Assessment up to assessment year 1987-88 ought to have been completed before 31st March, 1991. The return for assessment year 1987-88 could be furnished up to 31st March, 1990 and return for the earlier year ought to have been furnished before that date as per the relevant provisions contained in the W.T. Act. In no case the return of wealth for assessment year 1987-88 or earlier years could be furnished after 31st March, 1990 and no such assessment for assessment year 1987-88 or earlier year could be completed after 31st March, 1991. He also submitted written submissions along with letter dated 17-10-1995 in which elaborate arguments were submitted to support this contention. 4.2 The learned Sr. departmental representative also submitted written submissions in this regard to support the view taken by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... day of April, 1988, it may be furnished at any time up to and inclusive of the 31st day of March, 1991 or before the completion of the assessment, whichever is earlier. Section 16(7) reads as under : (7) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions for the time being in force and applicable to the relevant assessment year. Section 17A(1) reads as under : 17A(1) : No order of assessment shall be made under section 16 at any time after the expiry of two years from the end of the assessment year in which the net wealth was first assessable. Provided that--- (a) where the net wealth was first assessable in the assessment year commencing on the 1st of April, 1987, or any earlier assessment year, such assessment may be made on or before the 31st day of March, 1991 ; (b) where the net wealth was first assessable in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under section 17 of the W.T. Act to regularise the proceedings and could then make an assessment in accordance with separate limitation of time provided in section 17A, sub-section (2) and the proviso to sub-section (2). In the present case, the Wealth-tax Officer has not issued any notice under section 17 for regularising the belated and non est return furnished after the prescribed limitation of time. Therefore, the assessment for assessment year 1987-88 or any earlier assessment year ought to have been made on or before 31-3-1991. The assessments in the present cases for assessment years 1986-87 and 1987-88 have admittedly been made in the month of February/March 1992. The assessments so made after the expiry of limitation of time prescribed in proviso (a) to section 17A(1) are, therefore, clearly barred by limitation of time. Such a common ground raised by these assessees in the concerned appeals is, therefore, allowed. 5. The remaining grounds raised in all these appeals [except the Appeal Nos. 656 to 658 relating to penalty under section 18(1)(a)] involve consideration of points relating to non-deduction of outstanding wealth-tax and income-tax liabilities or it relates t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee is a habitual defaulter and is violating all the provisions not only in filing the W.T. returns, but also in Income-tax Act. He, therefore, levied penalty under section 18(1)(a) for all the aforesaid years. 6.3 Shri C.K. Vohra, the learned CWT(A) by his common order dated 4-1-1995 dismissed the appeals submitted by the assessee for all the three years under consideration. He has given elaborate reasons in support of the view taken by him in the aforesaid common order. 6.4 The learned Sr. departmental representative submitted that the assessee had raised three-fold arguments before the CIT(A). First it was stated that returns for assessment years 1981-82 and 1982-83 were filed under the Amnesty Scheme and, therefore, no penalty should have been levied. The second contention was that the Assessing Officer should have accepted the contention of the appellant that the delay in submission of the return was for reasonable cause. The third contention was that since in this case, the Income-tax returns were also filed late, at least, the delay up to the date of filing of the Income-tax returns should not have been taken into account for the computation of penalty. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appearing at pg. 4 to 10 of the said order. 6.8 The learned Sr. departmental representative further placed reliance on judgment of Hon'ble Gujarat High Court in the case of Ganpatlal N. Dalwadi v. CIT [1993] 2001TR 503. It was held by the Hon'ble Gujarat High Court in that case that the contention raised by the assessee was only to the effect that he had not got his share of profit from the partnership business income and that, therefore, he had not filed his return in time. He did not offer any other explanation. There was no evidence on record to show that the books of account of the firm were not ready or that the assessee's share income from the firm was not worked out in time. The Hon'ble High Court held that the assessee had not discharged the burden of proving the there was a reasonable cause for delay in filing of the return. Penalty was sustained. 6.9 Mr. Lohia then relied upon another judgment of Hon'ble Gujarat High Court in the case of CIT v. J.L. Trivedi Sons [1994] 210 ITR 112. In this case it was held by the Hon'ble High Court that when a default, which is a continuing default, is committed and again a similar default is committed thereafter, it will not be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the decision reported in Jiyalal Shyamlal (HUF) v. WTO [1988] 31 TTJ (Jab.) 538. He, therefore, strongly urged that the penalty should be confirmed. 6.12 The learned counsel for the assessee submitted that the Tribunal in assessee's own case for assessment years 1978-79 and 1979-80 has directed the WTO to exclude the period up to which the I.T. returns for the respective years were not filed. The delay in submission of I.T. return for the respective year has thus been accepted as a reasonable cause explaining the delay in submission of W.T. return of that particular year. Such a view is fully supported by the judgment of Hon'ble Madras High Court in the case of Babulal K. Shah which has been followed by the Tribunal in various cases of this very group. No contrary judgment of any High Court has been pointed out by the learned CIT(A) or by the learned Sr. departmental representative. In the absence of any contrary view of any other High Court, the Tribunal is bound to follow the judgment of the Hon'ble High Court other than the judgment of Hon'ble Jurisdictional High Court. The Tribunal is also bound to follow its own decision on identical facts in the cases of H.H. Mahara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by the learned representatives. The learned counsel for the assessee candidly admitted before us that the assessee could not submit necessary material and evidence in support of his contention that delay in filing of the returns had, inter alia, occurred on account of prolonged illness of the Accountant and the assessee. It is, therefore, a case where the assessee could not submit any evidence to prove that there was a reasonable cause justifying the delay in submission of the W.T. returns except that I.T. returns could not be prepared and that should be regarded as a valid excuse or a reasonable cause justifying the delay in submission of W.T. return. 6.16 The learned counsel for the assessee also did not advance any arguments before us to support his contention that W.T. returns for assessment years 1981-82 and 1982-83 were covered under the Amnesty Scheme. 6.17 It is also true that the assessee has committed default by way of delaved submission of all its I.T. and W.T. returns and it can be categorised as a habitual defaulter. 6.18 However, the only point which requires our serious consideration is whether the ratio of the two judgments of Hon'ble Madras High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the delayed filing of income-tax returns, it cannot be a relevant factor for the purpose of the application of section 18(1) of the Act. However, the Tribunal appears to take the view that the assessee could not file the wealth-tax returns before he finalised the income-tax returns and, therefore, the delay after the filing the income-tax return should alone be taken for the purpose of section 18(1)(a). It cannot be said that section 18(1) creates an absolute liability to pay penalty for delayed filing of returns. The section, as already stated, penalises only the delays which are not for reasonable cause. Therefore, discretion is given to the authorities under section 18(1) to find out whether the delay is due to a reasonable cause and, if the assessee establishes that the delay is for a reasonable cause, not to levy penalty. As a matter of fact, this Court in V.L. Dutt v. CIT [1976] 103 ITR 634 (which, in turn, referred to Hindustan Steel Ltd v. State of Orissa [1972] 83 ITR 26 (SC) has pointed out (p. 643) " Penalty will not be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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