A penalty based on the wealth tax law can’t be imposed with out particular findings: ITAT

By Mariya Paliwala

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The Income Tax Appellate Tribunal (ITAT), Rajkot Bench, has ruled that the penalty under the Wealth Tax Act cannot be levied without specific findings.

The Assesee, Yannaben Anilbhai Jethani, is a person who filed an income statement for AY 2011-12 showing a total income of Rs.1,72,290 / -. In the assessment according to Section 143 (3), the repaid income was recognized and assessed accordingly. The AO then found that the Assesse was obliged to submit a wealth tax return, but did not do so. According to the AO, the total assets were Rs. / – and after deducting the exemption assets of Rs. 30.00 lakhs, the net assets are Rs. 77.78.088 / -.

Since the expert did not submit the declaration, her case was resumed in accordance with Section 17 and announced on October 27, 2014 in accordance with Section 17 (1) of the Act. In response to this notification, the agent filed a property tax return on 02/11/2015 indicating a net worth of Rs.86.78.088 / -. The assessment according to § 16 para. 3 r.w.s. 17 WT law was concluded on November 16, 2015 by accepting the taxable net assets as the return of the asset. At the same time, the AO initiated fine proceedings in accordance with Section 18 (1) (c) for not submitting the wealth tax return on time.

The AO issued the necessary notification and requested a response to the planned fine. In the absence of a satisfactory response from the Assesse, the AO determined that the Assesse had deliberately failed to disclose the full and true value of the property and that the Assesse's failure to hide or conceal the property served to pay taxes avoid. The AO therefore found satisfaction that the Assesse's case was punishable because the Assesse had withheld his assets or provided incorrect information.

As a result, the AO imposed a penalty of Rs.56,780 / -. This issue was agitated before the CWT (A), which it was found to be a clerical loophole in the penalty notice, this could not help the Assesse to conclude that the AO was not clear under what aspect the penalty was initiated / levied. He denied the assessee's allegations, treating it as technical, and upheld the WTO order.

Attorney G. R. Sanghvi on behalf of Assessee urged that the order issued by the tax authorities was unlawful as a fine was issued under Section 18 (1) (2) of the WT Act for “submitting inaccurate information and withholding information about assets”; while the penalty was imposed for another reason, d. H. "The Assesse made the concealment or false information about his property".

The Coram, led by Vice President Rajpal Yadav and Accountant Member Amarjit Singh, noted that the AO was not specific in its finding for which it visited the Assesse with punishment.

"If the satisfaction of the AO when initiating a sanction procedure according to § 271 Paragraph 1 Letter c of the Income Tax Act 1961 concerns the alleged concealment of income by the authorized representative, while the imposition of the sanction for" concealment / incorrect information about the income "is the At this point it should be pointed out that Section 271 (1) (c) of the Income Tax Act 1961 and Section 18 (1) (c) of the Property Tax Act 1957 have the same priority in terms of purpose and purpose, and therefore a Legislative proposal stipulated by various higher court instances also applicable in the same way in the cases of proceedings according to § 18 (1) (c) of the law, ”said the ITAT, lifting the sentence.

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