RAMESH CHANDRA GUPTA v. WEALTH-TAX OFFICER
[Citation -1985-LL-0121-2]

Citation 1985-LL-0121-2
Appellant Name RAMESH CHANDRA GUPTA
Respondent Name WEALTH-TAX OFFICER
Court ITAT
Relevant Act Wealth-tax
Date of Order 21/01/1985
Assessment Year 1970-71, 1971-72
Judgment View Judgment
Keyword Tags valuation officer • ignorance of law • cold storage
Bot Summary: The returned wealth for these years was Rs. 1,05,000 and Rs. 1,02,700 respectively. Explanation of the assessee was that in the earlier years, he was minor and his mother had acted as his guardian. In case of such marginal return of wealth, it cannot be taken that the assessee was under the impression that he was liable for tax and time was taken to remove that impression. Further the young age of the assessee is also a factor worth consideration in support of lapse on his part to furnish the return in time. The WTO observed that mother of the assessee was a regular income tax payer and assessee s family members were also wealth-tax payers. Even if all these facts and circumstances are taken together, they do not take away the force of the explanation of the assessee that he had then just come out of age and was ignorant of the WT Act. The circumstances were such that the assessee having become major his guardian had left control over his legal affairs and he despite being educated was still presumably not well versed in his own affairs.


S. K. JAIN, J.M.: WTO imposed under s. 18(1)(a) of WT Act, 1957 penalty of Rs. 10,125 and Rs. 7,375 for filing returns of wealth for asst. yrs. 1970-71 and 1971-72 late by 45 and 33 complete months respectively. returned wealth for these years was Rs. 1,05,000 and Rs. 1,02,700 respectively. On assessment wealth was determined by WTO at Rs. 1,45,000 and Rs. 1,44,700 respectively in these years. Enhancement of Rs. 40,000 in asst. yr. 1970-71 and of Rs. 42,000 in asst. yr. 1971-72 was due to appreciation in value of bailing of Gupta Cold Storage taken into consideration by Valuation Officer. On appeal by assessee, AAC confirmed penalties imposed by WTO by consolidated order dt. 15th Feb., 1984 for both years. Hence assessee is in appeal. For convenience, we propose to dispose of both appeals by this common order. Explanation of assessee was that in earlier years, he was minor and his mother had acted as his guardian. In year 1970, when return of wealth for asst. yr. 1970-71 was due to be filed, he had just come out of age and he and so also his mother were ignorant about provisions of WT Act. explanation was not found satisfactory by WTO and so also by AAC of WT. After hearing ld. Representatives of parties in our judgment, both appeals deserved to be allowed. It is to be seen that circumstances under which returns for both years were filed show reasonable cause for delay. It is true that assessee cannot escape liability under law on grounds that he was ignorant of law. We do see that there cannot be any presumption that every person knows law but there by ignorance of law cannot be pleaded in defence of breach of law. However in instant case, returned wealth in both year exceeded maximum amount of wealth came t o be determined at higher amounts in these two years, because of appreciation in value of building according to report of Valuation Officer and in absence of intention or knowledge of assessee that he purposely furnished return for lower amount of wealth. In case of such marginal return of wealth, it cannot be taken that assessee was under impression that he was liable for tax and time was taken to remove that impression. Further young age of assessee is also factor worth consideration in support of lapse on his part to furnish return in time. WTO observed that mother of assessee was regular income tax payer and assessee s family members were also wealth-tax payers. He further observed that assessee belonged to very rich family and was educated. Even if all these facts and circumstances are taken together, they do not take away force of explanation of assessee that he had then just come out of age and was ignorant of WT Act. circumstances were such that assessee having become major his guardian had left control over his legal affairs and he despite being educated was still presumably not well versed in his own affairs. In view of fore-going discussion, in our judgment, there was reasonable cause for delay particularly when one would not think of furnishing wealth-tax return when his wealth is just on margin of paying wealth-tax. We, therefore, set aside order of AAC of WT and cancel penalties of Rs. 10,125 and Rs. 7,373 for both years. In result, appeals are allowed. *** RAMESH CHANDRA GUPTA v. WEALTH-TAX OFFICER
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