TMI Blog2012 (9) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... condition is also complied for various years upto the Assessment Year 2004-05. Tribunal, confirm the penalty imposed u/s 18(1)(c) for all the years except for Assessment Year 2005-06. Appeal decides in favour of revenue. - WTAs No. 1 to 5/Chd/2011, 10 to13/Chd/2011 & 14 to18/Chd/2011 - - - Dated:- 22-6-2012 - SHRI H.L. KARWA, AND SHRI T.R. SOOD, JJ. Appellant by: Shri S.K. Mukhi and Miss Jyoti Respondent by: Shri N.K. Saini ORDER PER T.R. SOOD, A.M In this group of cases identical issues have been raised regarding levy of penalty u/s 18(1)(c) of WT Act, therefore, with the consent of both the parties, the facts in the case of Shri Subhash Duggal have been considered because it was agreed that other cases are similar and the decision in the case of Shri Subhash Duggal may be applied to other cases. 2. WTAs No. 1 to 5/Chd/2011 - Subhash Duggal V WTO - In all these appeals identical grounds have been raised which are as under: 2 "1 That the order passed by the ld. CWT(A)-II is illegal, defective and has been passed u/s 250(6) of Income-tax Act, 1961. 2. That the ld. CWT(A)-II has erred in rejecting the appeal of appellant. Regarding the imposition of pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y after the search operation and in such unfavourable circumstances the assessee could not conceptualize the lawful obligation to file the wealth tax returns in view of cash available with him which he had withdrawn from his capital account with the firm where he was a partner. Hence it was an innocent failure to file the wealth tax return and therefore, no penalty should be levied. 5. The ld. CWT(A) did not agree with the submissions and confirmed the levy of penalty vide para 5 which is as under: "I have gone through the written submissions filed by the appellant's counsel and also perused the relevant assessment record. As the Assessing Officer has imposed penalty on the ground that the appellant has filed the Wealth tax return only after concealment was pointed out by the department and in response to the notices issued by the department. Considering the totality of the facts and circumstances of the case, I am inclined with the observations of the Assessing Officer that the appellant furnished its W.T returns after issuance of notice u/s 17 of the W.T Act, 1957. Facts of the case in hand is similar with the case of Prempal Gandhi V. CIT, 231 CTR 100, in which the Hon'ble P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urns were to be filed because of the preparation of cash flow chart and ignorance of law should be construed as reasonable cause and in this regard he relied on the decision of Agra Bench of the Tribunal in case of Shri Haridevji Gaushala Trust V. CIT, (2008) 9 DTR (Agra) (Trib) 384. He also relied on the decision of Hon'ble Bombay High Court in case of CIT V. Shamlal Balram Gurbani, 249 ITR 501 (Bom). 7. On the other hand, the ld. DR for the revenue while strongly supporting the order of ld. CWT(A) submitted that the assessee had prepared cash flow chart to defend his investments and once cash was found to be available, the assessee was duty bound to file his wealth tax return. Cash flow chart was filed on 10.2.2006 and at least the assessee could have filed his wealth tax return by that date but still the assessee choose not to file the wealth tax return. In fact despite the notice on 31.5.2007, wealth tax returns were filed on 12.12.2008 which clearly shows that the assessee had deliberately tried to avoid wealth tax liability. He contended that the WTO correctly invoked Explanation 3 to section 18(1)(c) of WT Act and this Explanation is found to have changed the theory rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur opinion, this is not a reasonable cause. Once the assessee prepared Cash Flow Statement to take benefit under Income-tax proceedings, he should have filed wealth tax returns. 10. We further find that even the decision of Agra Bench of the Tribunal in case of Shri Haridevji Gaushala Trust V. CIT (supra) cannot assist the assessee much. In that case the assessee was a charitable trust and could not apply for registration in time whereas in case before us assessee prepared. Cash Flow Statement to explain investments etc. in income-tax proceedings then how the assessee can be called ignorant of not knowing the fact that once the wealth tax return exceeded taxable limit then the same required filing of wealth tax returns. In any case the Hon'ble Punjab Haryana High Court in case of CIT V. Sunil Kumar Goel, 274 ITR 53 while reversing the order of the Tribunal for deleting penalty u/s 271D and 271E at page 59 has observed as under:- "If the order passed by the Tribunal is scrutinized in the light of the aforementioned proposition of law, we do not find any difficulty in setting aside the same on the ground of violation of the rules of natural justice. The flowery language used by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) is satisfied that in respect of such Assessment Year such person has assessable net wealth, then, such person shall, for the purposes of clause (c) of this sub-section, be deemed to have concealed the particulars of his assets or furnished inaccurate particulars of any assets or debts in respect of such Assessment Year, notwithstanding that such persons furnishes a return of his net wealth at any time after the expiry of either of the periods of aforesaid applicable to him in pursuance of a notice u/s 17." This explanation is identical to the explanation of Section 271(1)(c) and which came for interpretation before the Hon'ble Gujarat High Court in case of Chhaganlal Suteriya V. ITO (supra). The Hon'ble High Court in that case observed as under: "A mere failure to furnish a return of income does not amount to concealment u/s 2711)(c) of the Income-tax Act, 1961. But the introduction of Explanation 3 to section 271(1) with effect from April 1, 1976, has changed the law on the point in certain cases. For the purpose of falling within the purview of Explanation 3, (i) a person should not have been previously assessed (that is, he should be a new assessee); (ii) he sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is also complied for various years upto the Assessment Year 2004-05. However, as far as Assessment Year 2005-06 is concerned, this condition is not satisfied because the assessment for Assessment Year 2005-06 could have been completed upto 31st March, 2008 and the notice has been issued before that date i.e. 31.5.2007. Therefore, penalty could have been imposed only upto Assessment Year 2004-05, Accordingly we confirm the penalty imposed u/s 18(1)(c) for all the years except for Assessment Year 2005-06. Accordingly the appeals filed by the assessee for all the years except Assessment Year 2005- 06 are dismissed. 12. In the result, WTAs No. 1 to 4/Chd/2011 are dismissed and WTA No. 5/Chd/2011 stands allowed. 13. WTAs No. 10 to 13/Chd/2011 - Parmod Duggal V. WTO 14. The facts in all these appeals are identical as discussed above while adjudicating WTAs No. 1 to 5/Chd/2011 which have been adjudicated in above paras. Applying the above noted decision, the penalty is confirmed in WTAs No. 10 to 12/Chd/2011 and deleted in WTA No. 13/Chd/2011 - A.Y 2005-06. 15. In the result, WTAs No. 10 to 12/Chd/2011 are dismissed and WTA No. 13/Chd/2011 is allowed. 16. WTAs No. 14 to 18/Chd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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