Punjab & Haryana H.C : Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in cancelling the penalty by holding that the delayed completion of the accounts of the firm constituted a reasonable cause for the delay in the filing of the wealth-tax return of the assesseepartner without requiring him to prove that he was diligent and vigilant and made all efforts to get the accounts of the firm completed in time ?

Counsel Appeared

L. K. Sood, for the Revenue : S. S. Mahajan & J. S. Bhatti, for the Assessee

S. S. SODHI, J.:

The reference here has to be returned unanswered. The question referred for the opinion of this Court being :

“Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in cancelling the penalty by holding that the delayed completion of the accounts of the firm constituted a reasonable cause for the delay in the filing of the wealth-tax return of the assesseepartner without requiring him to prove that he was diligent and vigilant and made all efforts to get the accounts of the firm completed in time ?”

The facts relevant to this matter are that the wealth-tax return for the asst. yr. 1971-72 which should have been filed on or before 30th June, 1971, was filed beyond that date by the assessee, namely, on 20th Feb., 1973. At the time of assessment, the WTO also initiated penalty proceedings against the assessee under s. 18(1)(a) of the WT Act, 1957 (hereinafter referred to as “the Act”), for not having filed the wealth-tax return in time. The assessee submitted a written explanation to account for this delay by taking the plea that as the accounts of the firm, of which he was a partner, had not been completed within time, he could not ascertain the value of his interest in that firm and could not, therefore, file the wealth-tax return in time. This explanation was rejected by the WTO who imposed a penalty of Rs. 15,430. On appeal, the AAC held that the assessee had reasonable cause for the delay in the filing of the wealth-tax return and the imposition of penalty was consequently not justified. This order of the AAC cancelling the penalty was upheld on appeal by the Tribunal. It is this that led the CWT, Amritsar, to seek the reference now before us.

It is now well-settled, as held by this Court in CIT vs. Vidya Sagar (1975) 100 ITR 281, that the question whether there was reasonable cause for filing a delayed return, is a pure question of fact and no question of law arises therefrom and no reference can, therefore, be sought with regard to it. A similar view was expressed in two later judgments of this Court namely, Addl. CIT vs. Roshan Lal Kuthiala (1978) 100 ITR 329 and CWT vs. Kamla Devi (1980) 126 ITR 483.

Further, it has also been ruled by this Court in Telu Ram Raunqi Ram vs. CIT (1984) 146 ITR 401, that if the decision of a High Court of a State covers a question sought to be referred to that High Court, then so far as the Tribunal of that State is concerned, no referable question of law can be said to arise, even if the given question raises a question of law, as otherwise it will tantamount to questioning the correctness of the binding decision of the High Court by the Tribunal.

The legal position being as set forth above, this reference cannot but be left unanswered and is accordingly returned as such.

D. S. TEWATIA, J.:

I agree.

Decision in favour of Answer Declined.

[Citation : 171 ITR 91]