Case Law Details
Briefly stated facts are that assessee is an individual and has declared net wealth of ₹1 ,65,86,600/- under Wealth Tax Act in response to the notice issued u/s 17 of WT Act dated 31-12-2009 and the same was accepted by the AO in his assessment order. However the AO initiated the penalty proceedings under section 18(1 )© of the Act in the assessment order. As noticed by AO that assessee did not file his wealth tax return voluntarily, so notice u/s 18(1 )© of the WT Act was issued to initiate the penalty proceedings. However, Ld. AR of assessee demonstrated before AO that assessee is a non-technical person and solely dependent upon the advice of his accountant in respect of technical matters, accordingly, assessee was under the impression that liability for filing of Wealth Tax return would be looked after by his accountant. As the assessee received the notice for filing wealth tax return, he immediately acted and reacted accordingly and paid the demand of tax on time. Assessee also brought the matter before AO that penalty should not be levied as he was solely dependent upon the advice of his accountant but his accountant did not remind him to file the return of wealth tax. Therefore, it was sufficient cause for not filing the wealth tax return on time. However, AO disregarded the claim of assessee and imposed penalty @ 200% tax sought to be evaded u/s. 18(1 )© of the Act.
Aggrieved, assessee preferred appeal before Ld. CWT(A). Before Ld. CWT(A), AR of assessee submitted that there was a search and seizure action initiated by Central Excise Department and Income Tax Department on dated 31.05.2005 and 20.11.2006 respectively. Consequently, assessee had gone before Hon’ble Settlement Commissioner against the action taken by Central Excise and I.T. Department. So the assessee was busy in the litigation matter with the Department as stated above, he omitted to file his wealth tax return on due time. However, as soon as notice was received, assessee immediately submitted his wealth tax return and paid due tax thereon immediately. It was also observed by the Ld. CWT(A) that assessee then received notice u/s 17 of the Act promptly furnished and paid his wealth tax with interest. This shows the cooperation on the part of assessee to set the things right besides the assessment has been completed after accepting the net wealth as filed in the return of wealth tax. Accordingly, Ld. CWT(A) has reduced the penalty from 200% to 100% of the amount of tax sought to be evaded. Aggrieved, assessee is in second appeal before us.
Shri Amit Kumar, Ld. Authorized Representative appearing on behalf of assessee and Shri Sanjit Kr. Das, Ld. Departmental Representative appearing on behalf of Department.
We have heard rival parties and perused the materials available on record and gone through the facts of case of assessee. Before us Ld AR of assessee fairly submitted that assessee has been filing wealth tax return for the last many years and assessee never defaulted in filing the wealth tax in earlier period. In the relevant year, there was a search of IT department as well as Central Excise Department therefore assessee was occupied in handling those matters for which assessee approached before Ld. Settlement Commissioner for settlement of cases. So assessee could not pay the attention on his wealth tax return, besides, the accountant of assessee did not remind him or advice regarding filing of wealth tax return and he prayed to us for the waiver of the penalty imposed by Ld. CWT(A). Careful analysis of the fact reveals that there were two search and seizure conducted on assessee and which took place during the relevant year and the plea of Ld.AR that assessee was under compulsion of the documents to be produced before the Ld. Settlement Commissioner, we understand that in case of search, assessee is to comply with law and various declaration and formalities which certainly take lot of time. From the aforesaid situation and circumstances, it is clear that there was sufficient cause which prevented the assessee to pay wealth tax in the wealth tax return. Therefore, in the interest of natural justice, we delete the penalty imposed by Assessing Officer and confirmed by Ld. CWT(A).
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