Commissioner of Wealth Tax vs Suresh Chandra Badrilal

Shukla, J.—This is a reference u/s 27(1) of the W.T. Act, 1957, by the Income Tax Appellate Tribunal, Indore, stating the case and referring it to us for opinion on the following question :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in cancelling the penalties imposed by the WTO u/s 18(1)(a) of the W.T. Act, 1957, in respect of the assessment years 1970-71 and 1971-72, respectively, placing reliance on the circular of CBDT No. 78 F.No. 328/11/72-WT.

The assessee filed his returns of net wealth for the assessment years 1970-71 and 1971-72 on November 18, 1970, and November 16, 1971, respectively. The WTO found that the above two returns were filed late by three months. He initiated penalty proceedings u/s 18(1)(a) of the W.T. Act and imposed penalties for the above default. The AAC dismissed the appeal and upheld the levy of penalties imposed by the WTO.

The assessee filed a second appeal before the Tribunal. The Appellate Tribunal held that by virtue of a circular dated October 30, 1972, issued by the CBDT, the last date for filing of the return in the case of an assessee holding agricultural assets had been extended till the end of February, 1972. According to the Tribunal since the wealth of the assessee included agricultural assets, he was entitled to the benefit of the extended date, vide the aforesaid circular. On this ground the penalties were deleted.

Learned standing counsel for the Revenue contended before us that the Tribunal erred iu holding that the assessee was entitled to the benefit of extension of time granted by the CBDT. According to him the assessee could claim the benefit of this provision only if he had fulfilled the condition mentioned in the circular to the effect that his agricultural assets had to be valued by a qualified valuer. Learned counsel urged that an assessee who had not got his agricultural assets valued by a qualified valuer, was not entitled to claim the benefit of the extension granted under the said circular.

Copy of the circular of CBDT has been filed at annex. 14 of the paper book. Perusal of this circular clearly indicates that the extension of time was not loaded with any condition precedent. It was a general extension in respect of all assessees who held agricultural assets. The circular only mentioned a reason for granting general extension when it referred to the fact that assessees holding agricultural lands may be required to get their agricultural assets valued properly by a qualified valuer. This was not a condition precedent for claiming the benefit of extension mentioned in the circular.

We, therefore, hold that the Tribunal was justified in cancelling the penalties placing reliance on the circular of the CBDT dated October 30, 1972.

There will be no order as to costs.