TMI Blog1977 (4) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... ted prior to April 1, 1969, should be applied for the purpose of calculation of penalty under section 18(1)(a) of the Wealth-tax Act, 1957, in this case ? and 2. Whether, on the facts and in the circumstances of the case, it has been rightly held that the default for belated filing of wealth-tax return should be deemed to have commenced from the day next to the date of filing of the income-tax return in this case ? " The assessees are residents of Pondicherry. They were served with notices under section 14(2) of the Wealth-tax Act, 1957, which required them to file their return of wealth on or before June 30, 1968. They did not file the returns before the date. The returns were actually filed only on October 29, 1969, after a delay of n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the cases. On further appeal to the Apellate Tribunal, the assessees raised two questions, both relating to the basis of penalty, the question being whether penalty should be calculated as a percentage of the net wealth as was done by the officer, or whether it should be as a percentage of the wealth-tax on the basis of section 18(1)(a)(i) as it existed before April 1, 1969. The second question raised before the Tribunal related to the correct ascertainment of the period of default, for purposes of determining for how many months' delay the penalty had to be reckoned. On the first question, the Tribunal held that the law to be applied in a matter of levy of penalty was the law as it existed on the date when the default had occurred. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in the present reference in the affirmative and in favour of the assessees. On the second question relating to quantification of the penalties, the Wealth-tax Officer, as already observed, had taken the period of default in filing the returns to be 15 months in both the cases. The Tribunal, however, did not agree with this determination. Before the Tribunal it was represented on behalf of the assessee that for the very same assessment year 1968-69, the department had accepted their explanations for delayed submission of returns in regard to income-tax and the penalty proceedings initiated against them under the relevant provisions of section 271(1)(a) of the Income-tax Act, 1961, had been dropped. It was, however, contended on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and not the period of 15 months which the Wealth-tax Officer had adopted. The correctness of this approach is canvassed by the department before us in the present two references under the second question of law which we have set out earlier. The question for our consideration is whether the delay in the preparation of particulars of an assesse's income for purposes of filing his income-tax reasonable cause provide reasonable cause for the delay in filing his wealth-tax return. We are of the view that in certain circumstances the delay in finalising income-tax return might by itself be a just reason for the delay in filing the same person's wealth-tax return. Wealth-tax assessee are required to make returns of their net wealth on give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essments cannot be canvassed in the present proceedings. It is sufficient for the present case to know that the assessees' liability for income-tax was a necessary particular to be ascertained for preparing their wealth-tax returns, and that since the preparation of the income-tax returns got delayed, the attendant delay in the submission of the wealth-tax returns became unavoidable. It is not suggested that the assessees should have filed their wealth-tax returns even without caring to ascertain their income-tax liability for the year. It may be mentioned that the Tribunal had held that there was no excuse whatever for the assessees to delay their wealth-tax returns a moment after the submission of their income-tax returns. It is on this f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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