Madhya Pradesh H.C : 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 WT Act, 1957, in respect of the asst. yrs. 1970-71 and 1971-72, respectively, placing reliance on the circular of CBDT No. 78 F. No. 328/11/72-WT.

Counsel Appeared

R. C. Mukati, for the Reveune : M. L. Agrawal, for the Assessee

SHUKLA, J.:

This is a reference under s. 27(1) of the WT Act, 1957, by the 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 WT Act, 1957, in respect of the asst. yrs. 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 asst. yrs. 1970-71 and 1971-72 on 18th Nov., 1970, and 16th Nov., 1971, respectively. The WTO found that the above two returns were filed late by three months. He initiated penalty proceedings under s. 18(1)(a) of the WT 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 Tribunal held that by virtue of a circular dt. 30th Oct., 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 in 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. Persual of this circular clearly indicates that the extention of time was not loaded with any condition precedent. It was a general extention inrespect of all assessees who had agricultural assets. the circular only mentioned reason for granting general extention 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 perfect for claiming the benefit of extention mentioned in the circular.

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

There will be no order as to costs.

[Citation : 142 ITR 89]