2004 (8) TMI 64 - HC - Wealth-tax

Penalty u/s 18(1)(a) for the delay in filing the returns - there is no material on record to show as to why the income-tax returns had been delayed or as to why the wealth-tax return could not be prepared without the finalization of the income-tax return. There is no information even in respect of the tax liability as per the income-tax returns. The Tribunal has without examining these aspects accepted the plea of the assessee that the delay in filing the income-tax returns by itself constituted a sufficient cause for the delay in filing the returns of income. - As already observed delay in filing of wealth-tax return cannot be justified merely because there may be some liability towards income-tax which may get quantified at the time of filing of the income-tax return. - held that in the absence of any material on record justifying the delay in filing the returns the assessee was liable to penalty

Summary

Issues:
1. Delay in filing wealth tax returns for assessment years 1982-83 and 1983-84.
2. Applicability of penalty under section 18(1)(a) of the Wealth-tax Act, 1957.
3. Consideration of income tax return filing delay as a reasonable cause for wealth tax return filing delay.

Issue 1: Delay in Filing Wealth Tax Returns
The case involved appeals against the common order of the Income-tax Appellate Tribunal, Chandigarh Bench, regarding the assessment years 1982-83 and 1983-84. The returns for these years were filed late by the assessee, with a delay of 56 months for 1982-83 and four months for 1983-84. Penalty proceedings under section 18(1)(a) of the Wealth-tax Act were initiated due to these delays.

Issue 2: Applicability of Penalty
The Assessing Officer imposed a penalty at the rate of 2% per month for the delay in filing the returns. The assessee argued that since assessments were made on a protective basis, no penalty should be levied. The Commissioner of Wealth-tax (Appeals) accepted this argument and canceled the penalties. However, the Revenue appealed this decision before the Tribunal, which rejected the plea that no penalty was applicable due to protective assessments.

Issue 3: Reasonable Cause for Delay
The Tribunal accepted the assessee's argument that the delay in filing income tax returns should be considered a reasonable cause for the delay in filing wealth tax returns. It computed the penalty period from the date of filing the income tax returns. However, the High Court disagreed with this approach, stating that mere non-availability of income tax liability cannot justify the delay in filing wealth tax returns. The Court emphasized that each case should be examined based on its unique circumstances, and delay in filing income tax returns does not automatically excuse delays in filing wealth tax returns.

Judgment
The High Court allowed the appeals, holding the assessee liable for the entire delay period in filing wealth tax returns for both assessment years. The Court emphasized the need for specific justifications for delays and rejected the notion that delays in income tax return filings can automatically justify delays in wealth tax return filings.