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2016 (1) TMI 1068 - ITAT MUMBAI

2016 (1) TMI 1068 - ITAT MUMBAI - TMI - Levy of penalty - concealment of wealth - delayed filing of wealth tax return beyond all times allowed - non-filing of wealth tax return in time - no addition whatsoever has been made to the wealth returned by the assessee - Held that:- the return filed by the assessee was voluntary. After receipt of the return, notice under section 17 has been issued to regularize the said return. There is no material on record to show that any action under section Wealth .....

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MUM/2013 - Dated:- 20-5-2015 - Shri I. P. Bansal, Judicial Member And Shri D. Karunakara Rao, Accountant Member For the Appellants : Shri K. R. Lakshminarayanan For the Respondent : Shri Sacchidanand Dubey ORDER Per I. P. Bansal, J. M These appeals are filed by the respective assessees and they are directed against four separate orders passed by Ld. CIT(A)-40 Mumbai dated 13/3/2013 in respect of each of the appeals. Grounds of appeal in all the appeals are identical except difference in figures. .....

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addition to the wealth returned by the Appellant and therefore Appellant neither concealed particulars of any asset nor furnished inaccurate particulars of any asset / Debt. 4. The learned CWT failed to note that the one and only taxable wealth of Appellant was her jewellery and due to oversight she did not file the return in time. 5. It is prayed that the penalty of ₹ 65,158/-levied by the A.O. may be deleted. 2. For other assessment years the figures are as under. WTA No. Name of Assess .....

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ken therein would be equally applicable to all these appeals. 4. The assessees filed wealth tax returns in respect of impugned assessment years on 19/1/2011, which is a period beyond the period described in section 17A(1) of the Wealth Tax Act( Section 17A(1) described the time limit for completing the assessment under section 16) and also beyond the period described to file the return of wealth and also until the expiry of the period aforesaid no notice has been issued to assessee under clause( .....

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n 15/6/2011, in response to which assessee attended the proceedings and return filed by the assessee was accepted. However, invoking the provisions of Explanation -3 to section 18(1)(c) of Wealth Tax Act, the AO initiated the penalty proceedings. 4.1 The impugned penalty has been levied by the AO vide his order dated 27/6/2012. It may be mentioned here that AO has inter-changed the figure of assessable wealth for A.Y. 2007-08 & 2008-09 in para-1 of the penalty order, however, while levying p .....

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under section 17 of the Wealth Tax Act, which was issued on 15/3/2011. Wealth Tax return filed by the assessee has been accepted without any addition and thus, it was submitted that penalty should not be imposed. However, AO has imposed the penalty with the following observations. 3. I have considered the submission filed by the assessee and have given a careful: thought. However, it is pertinent to note that no return of net wealth has been furnished by the assessee within the time period spec .....

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f his assets within the meaning of Explanation 3 to section 18(1 )(c) of W.T. Act, 1957. 4. In view of the above I am satisfied that the act of the assessee is not bonafide hence it is a fit case to levy penalty u/s. 18(1)(c) of the Wealth Tax Act,1957. Accordingly, the minimum penalty @ 100% of tax sought to be evaded works out to ₹ 48,021/: and maximum penalty @ 500% works out to ₹ 2,40,105/-. I hereby levy minimum penalty @ 100% of tax sought to be evaded amounting to ₹ 48,0 .....

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9688/-. Only to regularize the return, notice under section 17 was issued by AO and in the assessment framed under section 16(3) the returned wealth has been accepted without any addition. Thus, it was pleaded that assessee did not conceal any wealth. It was submitted that levy of penalty is not mandatory and reference was made to the decision of Hon ble Supreme Court in the case of Hindustan Steel Ltd. vs. State of Orissa, 83 ITR 26 to contend that penalty should not be imposed. Considering the .....

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ied upon the judgement in the case of Hindustan Steel Ltd. (supra). However, this judgement is quite old and in the recent judgment in the case of Dharmendra Textile Processors Ltd., 306 ITR 277, the Hon ble Supreme Court observed that in case of penalty u/s. 271(1)(c), the AO is not required to prove mensrea. Provision of Section 271(1) (c) of the I.T. Act and 18(1)(c) of Wealth tax Act are similar. Further, as per Explanation (3) to Section 18(1) (c), the penalty is imposable on the facts of t .....

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rror in confirming the levy of concealment penalty. He submitted that decision in the case of ACIT vs. M/s. Sahara India Saving & Investment Corporation Ltd.(supra) has wrongly been relied upon by Ld. CIT(A). It was submitted that in the said case, notice under section 17 was served upon the assessee in the month of August,1994. Thereafter, the AO issued a letter dated 19/9/1995 requiring the assessee to show cause as to why in the absence of wealth tax return assessment may not be completed .....

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ion 17. It was submitted by him that there is no material on record, according to which it can be said that any action was contemplated by the Department in respect of wealth tax returns to be filed by the assessee before the assessee filed these returns voluntarily. Thus, it was submitted by Ld. AR that the facts of the present case are entirely different and it is a case where no concealment penalty is leviable. It was submitted that levy of concealment penalty is not automatic and it is subje .....

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resent case are not in dispute. Before any action was taken by the Department, the asessee has filed the wealth tax returns voluntarily and has paid not only the taxes on the wealth assessable but also the interest due on the belated payment of the taxes. There is no material on record to suggest that before the assessee filed the returns of wealth, any action for the default of non-filing of wealth tax returns by the assessee was contemplated by the Department as it has been the contention of t .....

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have to examine that whether or not levy of concealment penalty in the present case is justified. 7.1 The law relating to levy of concealment penalty has been considered by the Hon ble Apex Court in various decisions and reference can be made to the decision of Hon ble Supreme Court in the case of Dilip N. Shroff, 292 ITR 519, wherein their Lordships while examining the nature of concealment penalty have observed that imposition of penalty is not automatic. Levy of penalty is not only discretion .....

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of the case are required to be kept in mind while deciding an issue that whether or not levy of concealment penalty is justified. 7.2 In the present case while initiating penalty proceedings as well as while levying penalty, Explanation-3 to section 18(1)(c) has been invoked. Explanation -3 read as under: [Explanation 3- Where any person fails, without reasonable cause, to furnish within the period specified in sub-section 91) of section 17A, a return of his net wealth which he is required to fu .....

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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 person furnishes a return of his net wealth at any time after the expiry of either of the periods aforesaid applicable to him in pursuance of a notice under section 17.] 7.3 The explanation itself describes that the default of the assessee should be without reasonable cause and it also de .....

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nciple of interpretation of statutory provisions, deeming provision of a statute are to be strictly interpreted. If we apply that principle to the present case, then it is not a case where the assessee has furnished his return in pursuance to notice under section 17 but the return has been furnished much before the issue of notice under section 17 and notice under section 17 has been issued only to regularize the return which was already filed by the assessee. The filing of return by the assesse .....

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