WEALTH TAX ACT, 1957

Section 18(1)(c)

Penalty under section 18(1)(c) - Validity - Applicability of Explanation 3 to section 18 - Time limitation

Assessee challenged order of revenue on grounds that period of limitation to complete the assessment in its matter was one year, which had expired. According to assessee since, in its case, a notice was served on 29-3-2007, the assessment order should have been passed at least by 31-3-2008. He submitted that the assessment order, was, in fact, passed on 13-6-2008 and consequently, the same was barred by limitation. Held: Both CWT(A) as well as the Tribunal held that Explanation 3 to section 18 was attracted. This was on the basis that for relevant assessment year 2003-04, the reassessment notice was issued to assessee prior to filing its returns. No doubt, Tribunal also observed that the issue of limitation was never raised by assessee in its reply. Observation made therein that Explanation 3 to section 18 was applicable, was really a prima facie observation. Tribunal also observed that the issues raised in the matter required investigation of facts. There was no reason to interfere with orders and revoke the remand order by the CWT(A) and by the Tribunal. WTO was to investigate into the factual aspect and will have to re-examine the matter and thereafter, conclude whether the period of limitation, as prescribed under section 17, was indeed attracted, in light of Explanation 3 to section 18.

REFERRED :

FAVOUR : Against the assessee

A.Y. : 2003-04

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