R.R.RASTOGI, J. - (1.) FOR the asst. yr. 1967-68, the assessee Smt. Manjeet Kaur, should have filed her wealth tax return by 30th Sept., 1967, under S. 14 (1) of the WT Act (hereafter 'the Act'). She, however, filed it on 22nd July, 1970, that is after a delay of 33 months. The WTO determined the net wealth at Rs. 4,15,385.00 which on appeal was reduced to Rs. 3,69,141.00. Before competing the assessment, the WTO initiated penalty proceedings under S. 18 (1)(a) of the Act and issued a show cause notice to the assessee. The assessee filed a written objection. After considering that objection, the WTO held that the delay was without reasonable cause and the assessee was liable to penalty under s. 18 (1)(a) of the Act. He levied penalty in the sum of Rs. 24, 323 calculate at the rate of two per cent of the tax for each month of default upto 31st March, 1969 and thereafter from 1st April, 1969 to 22nd July 1970 at the rate of half per cent of the net wealth for each month of default.
(2.) THE assessee preferred an appeal before the AAC and challenged the levy of penalty as also the quantum. According to the assessee, since default had occurred on 30th Sept., 1967, the law as applicable on that date should have been applied and the amendment made w.e.f. 1st April, 1969 raising the rate of penalty from 2 per dent of the tax to half per cent of the net wealth should not have been invoked and reliance was place on a decision of the Madras High Court in CIT vs. C. Muthukumaraswamy Mudaliar (1975) 98 ITR 540 (Mad). The AAC rejected the assessee's contention that penalty was not exigible in the case. He confirmed the finding of the WTO that the default was without any reasonable cause and thus penalty was attracted for the default in the filing of the return. As for quantum he accepted the assessee's contention and reduced it to 50 per cent of the tax, that is, Rs. 675. From that order the Revenue filed an appeal and the assessee filed a cross-objection before the Tribunal. The Tribunal, agreeing with the Revenue authorities, held that penalty for the delay in the filing of the return was exigible, but reduced the period of default inasmuch as the assessee's explanation was accepted for the period up to the end of 1967. Coming to the quantum of penalty the Tribunal agreed with the approach of the WTO and directed the penalty to be computed at the rate of two per cent on tax for each month of default up to 31st March, 1969 and at the rate of half per cent of the net wealth for each month of default from 1st April, 1969 to 22nd July 1970.
(3.) NOW , at the instance of the assessee, the Tribunal has referred the following question of law for the opinion of this Court : "Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in upholding the levy of penalty under S. 18 (1) (a) of the WT Act, 1957 for the asst. yr. 1967-68 at the rate of 2 per cent of tax for each month of default upto 31st March 1969 and at the rate of 1/2 per cent of net wealth for each month of default for the period subsequent to 1st April, 1969 to 22nd July, 1970?" ;