PRITHIPAL SINGH (DECD.) VS COMMISSIONER OF WEALTH TAX
1999 P T D 1726
[234 I T R 45]
[Supreme Court (India)]
Present: Mrs. Sujata V. Manohar and G.B. Pattanaik, JJ
PRITHIPAL SINGH (DECD.)
(through Legal Representative)
Versus
COMMISSIONER OF WEALTH TAX
Civil Appeal No.862 of 1987, decided on 05/05/1998.
Wealth tax---
----Penalty---Waiver or reduction---Failure to furnish return within time-- Imposition of penalty---Return filed voluntarily and in good faith prior to issue of notice under S.14(2)---Full cooperation extended to Department in enquiry relating to assessment proceedings though several adjournments obtained relating to obtaining of valuation report---Total tax involved only Rs.7,000---Fit case where penalty should be reduced to 50 per cent of what had been levied---Indian Wealth Tax Act, 1957, Ss. 14(2), 18(1)(a) & 18-B.
The Wealth Tax Officer imposed penalty under section 18(1)(a) of the Wealth Tax Act, 1957, for the assessment years 1972-73 to 1975-76, on account of failure of the appellant to furnish a return of net wealth within the time allowed under the Act. The appellant filed a petition under section 18-B of the Act for waiver of the penalty on the grounds that he had voluntarily and in good faith made full disclosure of his net wealth by filing the returns for the assessment years in question prior to issuance of any notice under section 14(2) of the Act and that he had cooperated in the enquiry relating to the assessment proceedings for all the assessment years. The Commissioner refused waiver on the ground that the assessee had obtained several adjournments on various grounds, some of which related to obtaining a valuation report and hence, the assessee had failed to cooperate with the Department. On appeal to the Supreme Court:
Held, allowing the appeal, that the total tax involved in all the assessment years was only Rs.7,000 and that the assessee had voluntarily filed the returns before the issuance of any notice. Therefore, taking into account the facts and circumstances of the case, this was a fit case where the penalty should be reduced to 50 per cent. of what had been levied.
Ashok Grover, Senior Advocate (R.K. Maheshwari, Advocate with him) for Appellant.
T.L.V. Iyer, Senior Advocate (T.C. Sharma and B.K. Prasad, Advocates with him) for Respondent.
JUDGMENT
Leave has been granted in the present appeal in respect of the question of penalty imposed on the appellant under section 18(1)(a) of the Wealth Tax Act which was not waived and/or reduced under section 18-B of the Wealth Tax Act by the Commissioner.
The assessment years involved are 1972-73 up to 1975-76. For the assessment year 1971-72, this Court has declined leave. Hence, we are not concerned with the assessment year 1971-72. Penalty has been imposed under section 18(1)(a) on account of the appellant's failure to furnish a return of wealth tax within the time allowed in the relevant assessment years. The delay ranges from 10 months to 34 months. The penalty which is levied has been calculated on the basis of half per cent. for every month of delay. The total amount of penalty levied for these assessment years comes to Rs.28,366.
In his petition under section 18-B, the assessee contended that penalty should be waived because he had voluntarily and in goods faith made full disclosure of his net wealth by filing the wealth tax returns for the relevant assessment years prior to issuance of any notice under section 14(2). He had also cooperated in the enquiry relating to the assessment proceedings for the said assessment years: The Commissioner, in this connection, has observed that the assessee had obtained several adjournments on various grounds, some of which "related to obtaining a valuation report'. Looking to the series of adjournments, the Commissioner felt the assessee had failed to cooperate with the Department. In view of the facts and circumstances of the present case, and the conduct of the assessee as set out in the Commissioner's order, the Commissioner was perhaps a little too harsh in not reducing the amount of penalty, specially when the total tax involved in all these assessment years was only about Rs.7,000. The assessee had voluntarily filed the wealth tax returns before the issuance of any notice under section 14(2). Looking to all the circumstances, this is a fit case where penalty should have been reduced to 50 per cent of what has been levied. It is ordered accordingly. The appeal is, thus, allowed. There will, however, be no order as to costs. '
M . B. A. /2093/FCAppeal allowed.