Kasliwal, J.
1. Learned members of the Appellate Tribunal have referred the following questions of law for the opinion of this court:
'1. Whether the Tribunal is right in interpreting Section 19 of the Wealth-tax Act, 1957, to the effect that no penalty under Section 18 could be imposed on a legal representative on whom assessment is made under Section 19 ?. If the answer to the above is in the affirmative, whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that no penalty was leviable on Smt. Sajjan Kumari, the legal representative of the deceased, Shri Bhanu Pratap Singh, in terms of Section 18(1)(a) of the Wealth-tax Act, 1957, for late filing of the return in respect of the valuation date of March 31, 1966
2. Whether the Tribunal was justified in holding that the law governing the imposition of penalty for default in late filing of the return would be the one obtaining on the date of satisfaction of the Income-tax Officer andthe date of assessment and not that obtaining on the date when the default was committed ?'
2. Brief facts of the case are that Rani Sajjan Kumari (hereinafter referred to as 'the assessee') was assessed to wealth-tax for the assessment year 1966-67 in the capacity of a legal representative of her late husband, Thakur Bhanu Pratap Singh, who had died on May 21, 1966. Since the return was not filed within the time allowed under Section 14(1) of the W.T. Act, 1957 (hereinafter referred to as 'the Act'), penalty proceedings were initiated under Section 18(1)(a) of the Act and a penalty of Rs. 69,395 was levied by the WTO.
3. The assessee, aggrieved against the aforesaid order, filed an appeal before the AAC. It was argued before the AAC that there was no provision in Section 19(3) of the Act, which enabled the WTO to levy penalty under Section 18(1)(a) on the legal representative of the deceased. It was argued that only the provisions of Sections 14, 15 and 17 of the Act applied to the legal representative, but not that of Section 18 of the Act. The AAC did not agree with the assessee's view so far as the assessment year 1966-67 is concerned, but he reduced the penalty as the calculation of the same had not been made correctly.
4. The assessee then preferred an appeal to the Income-tax Appellate Tribunal and the same arguments were repeated before the Tribunal as had been urged before the AAC. The Tribunal allowed the assessee's appeal on the preliminary ground that there was no provision in the W.T. Act for levy of penalty on a legal representative. It was also held by the Tribunal that Sub-section (3) of Section 19 of the Act cannot be divorced from the provisions of Section 19(1) and (2) of the Act. It was further observed by the Tribunal that if other provisions of the W.T. Act regarding framing of the assessment and the imposition of penalty, etc., were intended to be automatically applicable to the assessments made under Section 19, there was hardly any purpose in mentioning only Sections 14, 15 and 17 in Section 19(3) of the Act.
5. We have heard Mr. Surolia on behalf of the Department and Mr. Tikam Chand Jain on behalf of the assessee.
6. A perusal of Section 14 of the Act shows that return of wealth is required to be filed by every person, if his net wealth or the net wealth of any other person in respect of which he is assessable under this Act on the valuation date was of such an amount as to render him liable to wealth-tax under the Act. Such person is then required to file the return before the 30th day of June of the corresponding year in the prescribed form and verified in the prescribed manner setting forth the net wealth as on that valuation date. In the present case, it is an admitted fact that Thakur Bhanu Pratap Singh died on May 21, 1966, after the valuation date, i.e., March 31, 1966.So far as the assessee in the present case is concerned, she was not liable to file the return as she was not assessable on the valuation date, i.e., March 31, 1966, and Thakur Bhanu Pratap Singh (who was assessable) was himself alive on that date. In this view of the matter, it is clear from the language of Section 14(1) of the Act that there was no liability of the person assessed, namely, Rani Sajjan Kumari, to file any return of wealth in respect of her deceased husband, Thakur Bhanu Pratap Singh, and the provisions of Section 18 of the Act levying penalty cannot be attracted. It may also be mentioned that under Section 18(1)(a) of the Act, the WTO can take action when he is satisfied that any person has without reasonable cause failed to furnish the return which he is required to furnish under Sub-section (1) of Section 14 of the Act, or by notice given under Sub-section (2) of Section 14, or Section 17, or has without reasonable cause failed to furnish within the time allowed and in the manner required by Sub-section (1) of Section 14, or by such notice, as the case may be.
7. From the facts found established in the present case, it is clear that there was no requirement on the assessee to file the return of wealth under Sub-section (1) of Section 14 of the Act with regard to the wealth of her deceased husband and, in this view of the matter, the provisions of penalty contained under Section 18(1)(a) of the Act cannot be applied. Section 19(2) and (3) of the Act read as under :
'19. Tax of deceased person payable by legal representative.--......
(2) Where a person dies without having furnished a return under the provisions of Section 14 or after having furnished a return which the Wealth-tax Officer has reason to believe to be incorrect or incomplete, the Wealth-tax Officer may make an assessment of the net wealth of such person and determine the wealth-tax payable by the person on the basis of such assessment, and for this purpose may, by the issue of the appropriate notice which would have had to be served upon the deceased person if he had survived, require from the executor, administrator or other legal representative of the deceased person any accounts, documents, or other evidence which might under the provisions of Section 16 have been required from the deceased person.
(3) The provisions of Sections 14, 15 and 17 shall apply to an executor, administrator or other legal representative as they apply to any person referred to in those Sections.'
8. The scheme of the above provisions clearly shows that under Sub-section (2) of Section 19, where a person dies without having furnished return under the provisions of Section 14, the WTO may issue an appropriate notice which would have had to be served upon the deceased person if he had survived, on the legal representatives of the deceased person. In view of the above provision,if Thakur Bhanu Pratap Singh had not filed any return, the WTO could have taken action under Sub-section (2) of Section 19 of the Act. No such action has been taken in the present case and even if such action might have been taken, no question of imposing any penalty under Section 18 of the Act will arise in such a case. Sub-section (3) of Section 19 of the Act, which is part of Section 19 itself, also makes it abundantly clear that though the provisions of Sections 14, 15 and 17 have been made to apply to an executor, administrator or other legal representative, it is silent, so far as Section 18 is concerned. The omission of Section 18 in Sub-section (3) of Section 19 is quite significant, which clearly shows the intention of the Legislature that in case where action would be taken under Sub-section (2) of Section 19 of the Act, question of imposing any penalty on the legal representative cannot arise.
9. In view of the above circumstances, we hold that the Tribunal was right in interpreting Section 19 of the Act to the effect that no penalty under Section 18 could be imposed on a legal representative on whom assessment is made under Section 19 of the Act. We further hold that, on the facts and in the circumstances of the case, the Tribunal was also right in holding that no penalty was leviable on Rani Sajjan Kumari, the legal representative of the deceased Bhanu Pratap Singh, in terms of Section 18(1)(a) of the Act for late filing of the return in respect of the valuation date of March 31, 1966.
10. So far as the legal question No. 2 mentioned above is concerned, Mr. Tikam Chand Jain, learned counsel for the assessee, submitted that it has been authoritatively laid down by their Lordships of the Supreme Court in CWT v. Suresh Seth : [1981]129ITR328(SC) , that where the default complained of is one under Section 18(1)(a) of the W.T. Act, 1957, penalty has to be computed in accordance with the law in force on the last day on which the return in question had to be filed. It has been further held in the above case that non-performance of any of the Acts mentioned in Section 18(1)(a) gives rise to a single default and a single penalty the measure of which, however, is geared up to the time lag between the last date on which the return has to be filed and the date on which it is filed. The default, if any, committed, is committed on the last date allowed to file the return. The default cannot be one committed every month thereafter. Apart from the above question having been already decided by their Lordships of the Supreme Court in the above case, in our view, the question No. 2 does not arise in the circumstances of the present case in view of our answer to the first question in the manner indicated above.
11. This reference is, therefore, answered in favour of the assessee and against the Department in the manner indicated above. There will be no order as to costs.