TMI Blog1981 (12) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... ears, the assessee filed his return on November 2, 1972, although he had been served with notices under s. 17 of the Act for the three latter assessment years out of these, namely, 1969-70 to 1971-72. Proceedings for the imposition of penalty were initiated for the non-filing of returns and as the assessing officer was not satisfied about the existence of any reason able cause on the basis of the explanation offered, he imposed various amounts of penalties for these years. The assessee's appeals before the AAC were dismissed. He came to hold that the delinquency committed by the assessee was a, continuing one and, therefore, the law as it stood on the date of imposition of penalty was applicable for the computation of penalty and accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , consequently, they cannot comply with the terms of the Act unless they are advised by their taxation lawyers. It is not the case of the Appellate Assistant Commissioner that the assessee had not filed his wealth-tax returns although he was advised to file the same by his lawyer. The fact that the assessee's wealth became taxable in, the year 1964 was within the knowledge of his taxation lawyer cannot be denied because that wealth consisted of mainly his interest in two concerns-M/s. Ramniklal Co. and M/s. Venilal Co., the incomes from which were used to be returned by the assessee year after year for his income-tax assessment. We were told by the learned departmental representative that excepting one assessment year the assessee was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lanation must be regarded as satisfactory in the facts of the case ........" With these findings, the imposition of penalty has been annulled. There is no dispute that the law is not that in every case of default, the assessee be visited with penalty. In the celebrated decision of the Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 (SC), it has been clearly indicated by the Supreme Court that because there is a power to levy penalty, it is not obligatory that penalty should be levied. An assessee is visited with penalty when his conduct is contumacious or there is a wilful disregard of legal obligations. The WTO could in a given set of facts condone the delay by not penalising the assessee. That pow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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