Hindustan Marketing & ... vs Assistant Commissioner Of Wealth ...
1999 Latest Caselaw 480 Del

ORDER

J.P. BENGRA, J.M.

This is an appeal by assessee against levy of penalty under section 18(1)(a) of the Wealth Tax Act, 1957, pertaining to assessment year 1986-87. The assessee is a company engaged in the business of advertisement. The return of the assessee was due on 30-6-1986. The assessee moved application in Form No. 6 for extension of time up to 31-10-1986. However, the assessee filed its return on 30-9-1986. This return was not at all signed. Another return was filed on 26-8-1987, marked "Duplicate return". This return was also not verified nor it was signed. A notice under section 17 was issued on 6-10-1988, calling upon the assessee to file the return and the assessee filed return on 8-11-1988. According to the assessing officer, there was delay of 28 months reckoned from the due date of filing the return till the filing of the return on 8-11-1988, in persuance of notice under section 17. Penalty proceedings were initiated under section 18(1)(a) in reply to the said notice, the assessee -company filed a written submissions dated 16-4-1990, in which it was pleaded that the company had filed return on 30-9-1986, within the extended time. It was found that the same was not signed, therefore, letter was filed on 6-10-1988, seeking permission to rectify the deficiency. Instead of giving an opportunity to rectify the deficiency, the assessing officer issued notice under section 17. In this connection, it was further contended that the assessing officer has over looked the provisions of section 42C of the Wealth Tax Act. There was an omission is signing the return of the wealth, however, the tax was already paid, therefore, there cannot be any intention of the assessee not to sign the return was a mistake which could be condoned by the department. However, the assessing officer as well as the Commissioner (Appeals) did not agree with the contention of the assessee. Therefore, penalty was confirmed seeking support from the case laws, Bahan Lal Chatterlee v. CIT (1934) 2 ITR 377 (All) and Waman Padmanath Dande v. CIT (1952) 22 1TR 339 (Nag). Learned assessee's counsel pointed out that the assessee had all the intention to file the return. Therefore, he sought permission to file the same by 31-10-1986. However, the return was filed before the date expired on 30-9-1986. The tax was also paid. By mistake, the return was filed without noticing that it has not been signed by any authorised person. When this fact came to the notice of the company, a letter was written to the assessing officer on 6-10-1988, seeking permission to rectify the deficiency. However. no support was given instead of notice under section 17 was issued. The mistake in not signing the return was condonable in view of the provisions of section 42C of the Wealth Tax Act. It was inadvertent mistake on the part of the official of the company so the company should not be penalised for this technical mistake.

Reliance was placed on the decision of the Tribunal in the case of Inspecting Assistant Commissioner v. Punjab United Pesticides & Chemicals Ltd. (1989) 31 ITD 535 (Chd). Reliance was also placed on the decision of the Tribunal in the case of Vijay Trading Co. v. TTO (1985) 13 ITD 526 (Nag). The learned assessee's counsel further pointed out the decision of the Hon'ble Delhi High Court in Shakuntla Mehra v. CWT (1976) 102 ITR 301 (Del) and CWT v. B. Imran Hussain (1995) 128 CTR (Mad) 338 : (1995) 211 ITR 10 17 (Mad).

2. Learned departmental Representative relied on the order of the Commissioner (Appeals) and contended that the assessee filed her return which was invalid in the eyes of law. Therefore, no action could have been taken on that. It is further pointed out that notice was served on assessee for filing the return. In pursuance of that the return was filed on 8-11-1988. It was a belated return. Therefore, penalty was rightly levied.

2. Learned departmental Representative relied on the order of the Commissioner (Appeals) and contended that the assessee filed her return which was invalid in the eyes of law. Therefore, no action could have been taken on that. It is further pointed out that notice was served on assessee for filing the return. In pursuance of that the return was filed on 8-11-1988. It was a belated return. Therefore, penalty was rightly levied.

3. We have considered the rival submissions and have gone through the material available on record. In this case, the assessee filed unsigned return within the extended period. However, that was not traceable, therefore, another return marked as "Duplicate" was filed on 25-3-1987, that too without verification and unsigned. However, the facts remains that assessee has filed the tax on the basis of net wealth declared in the return and the same amount was ultimately computed by the Wealth Tax Officer in the assessment proceedings. When this fact came to the notice of the assessee, he tried to rectify the same by informing the assessing officer on 6-10-1988. However, instead of opportunity given to the assessee, he issued notice under section 17. It is also clear that when the assessing officer noticed that the return filed is unsigned, no defect notice was given to the assessee. It is the duty of the assessing officer to inform the assessee if he found any defect in the return. In the income-tax matter, there is specific provision of sub-section (9) of s 139 in which it is the duty of the assessing officer to intimate the defect to the assessee and give opportunity to rectify the defect. However, no such specific provision is given in 14 and 15 of the Wealth Tax Act. However, we find that section 42C provides

3. We have considered the rival submissions and have gone through the material available on record. In this case, the assessee filed unsigned return within the extended period. However, that was not traceable, therefore, another return marked as "Duplicate" was filed on 25-3-1987, that too without verification and unsigned. However, the facts remains that assessee has filed the tax on the basis of net wealth declared in the return and the same amount was ultimately computed by the Wealth Tax Officer in the assessment proceedings. When this fact came to the notice of the assessee, he tried to rectify the same by informing the assessing officer on 6-10-1988. However, instead of opportunity given to the assessee, he issued notice under section 17. It is also clear that when the assessing officer noticed that the return filed is unsigned, no defect notice was given to the assessee. It is the duty of the assessing officer to inform the assessee if he found any defect in the return. In the income-tax matter, there is specific provision of sub-section (9) of s 139 in which it is the duty of the assessing officer to intimate the defect to the assessee and give opportunity to rectify the defect. However, no such specific provision is given in 14 and 15 of the Wealth Tax Act. However, we find that section 42C provides

"42C. No return of wealth, assessment, notice, summons or other proceeding furnished or made or issued or taken on purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of wealth, assessment, notice, summons or other proceeding, if such return of wealth, assessment notice summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act."

3.1. Therefore, taking the spirit of law, we are of the opinion that when the assessing officer noticed that the return has not been signed whereas the tax has been paid, he should have intimated the assessee and should have given opportunity to rectify the defect. Taking into consideration the totality of the facts and circumstances of the present case, we are of the opinion that in a case like this where the assessment has been completed on the same figure returned by the assessee and tax were already paid because the return could not be signed, it cannot be said that this defect is not curable specially when the assessee has invoked the application on 6-10-1988 seeking permission to rectify the same. As such, we are of the opinion that penalty should not be levied. Our view is also supported by the order of the Tribunal in the case of Inspecting Assistant Commissioner v. Punjab United Pesticides & Chemicals Ltd. (supra).

3.1. Therefore, taking the spirit of law, we are of the opinion that when the assessing officer noticed that the return has not been signed whereas the tax has been paid, he should have intimated the assessee and should have given opportunity to rectify the defect. Taking into consideration the totality of the facts and circumstances of the present case, we are of the opinion that in a case like this where the assessment has been completed on the same figure returned by the assessee and tax were already paid because the return could not be signed, it cannot be said that this defect is not curable specially when the assessee has invoked the application on 6-10-1988 seeking permission to rectify the same. As such, we are of the opinion that penalty should not be levied. Our view is also supported by the order of the Tribunal in the case of Inspecting Assistant Commissioner v. Punjab United Pesticides & Chemicals Ltd. (supra).

4. In the result, the appeal is allowed.

4. In the result, the appeal is allowed.