TMI Blog1994 (12) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 1984-85 up to 31-10-1984 vide applications dated 1-6-1984 and 29-9-1984. No further extension for filing the return was sought by the assessee. In reply to the show-cause notice the assessee filed written submissions on 13-2-1989 and stated that the levy of wealth-tax was reintroduced by section 40 of the Finance Act, 1983 for the first time and the assessee-company came to know of it only through the auditors when they pointed out that the return had to be field. Therefore, the delay in filing of the return was on account of the said factual position. The assessee also relied on the decision of the Hon'ble Supreme Court in the case of Motilal Padampat Sugar Mills Co. Ltd. v. State of UP [1979] 118 ITR 326, wherein the Hon'ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsion of time had been made and the assessee continued to be in default up to 29-8-1985. He accordingly dismissed this plea of the learned counsel. Another plea taken by the learned counsel was that the assessee should not be penalised as there was no deliberate or dishonest intention of assessee to file the return late. The assessee had acted bonafide and had reasonable cause for filing the return late. In this connection the CWT (Appeals) analysed the statement of facts filed by the learned counsel and noted that the only reason attributed to the late filing of the return was ignorance of the assessee about the amended provisions relating to wealth-tax in the case of closely-held companies. He also noted that similar plea had been taken b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, i.e., section 18(1) (a) of the WT Act. He also referred to clause (a) of sub-section (5) which had specifically made certain provisions of the WT Act, 1957 inapplicable in the case of levy of wealth-tax on the closely-held companies. The Bench invited the attention of the learned counsel to the provisions of sub-section (7) which specify that 'this section shall be construed as one with the WT Act ". However, the learned counsel reiterated that the expression " levy of wealth-tax " will not cover penalties. He relied on the decision of the Hon'ble Supreme Court in the case of Associated Cement Companies Ltd. v. Director of Inspection C CE [1985] 153 ITR 322. He also invited our attention to page 4 of the letter dated 2 1 5-1988 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the penalty has been rightly levied by the lower authorities and the same should be sustained. 6. We have carefully considered the submissions made by both the parties in the light of the case law cited as also in the light of the provisions of section 40 of the Finance Act, 1983 and the provisions of the W.T. Act, 1957. The relevant provisions of section 40 are reproduced below for facility of reference : " 40. Revival of levy of wealth-tax in the case of closely-held companies.-- (1) Notwithstanding anything contained in section 13 of the Finance Act, 1960 (13 of 1960), relating to exemption of companies from levy of wealth-tax under the Wealth-tax Act, 1957 (27 of 1957) (hereinafter referred to as the Wealth-tax Act), wealth- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lth-tax only in the case of closely-held companies. We have carefully considered the arguments of the learned counsel for the proposition that the provisions of section 40 form a code by themselves for the levy of wealth-tax on closely-held companies and that they will not attract penalty provisions of the main Wealth-tax Act, 1957. We have carefully examined the history of the provisions relating to levy of wealth-tax on companies and it is observed that clause (a) of sub-section (5) of section 40 specifically makes certain provisions of W.T. Act, 1957 inapplicable for the purposes of levy of wealth-tax under the WT Act, e.g., (i) section 5 relating to exemptions in respect of certain assets, (ii) clause (d) of section 45 relating to non-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in other matters the provisions of WT Act, 1957 will apply. Any other interpretation will nullify the other provisions of WT Act, 1957, which could never have been the intention of the Parliament. If it were so it could have been so stated in section 40 of the Finance Act, 1983 as has already been done with reference to certain provisions specified in clause (a) of sub-section (5) of that section. Further, any such interpretation will lead to absurd results as it could also be argued that if penalty provisions are not applicable then the provisions relating to recovery of wealth-tax and other provisions will not apply. 6.2 With reference to the decision of the Hon'ble Supreme Court in the case of Associated Cement Companies Ltd. relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X
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