1. This is an appeal by the revenue which is directed against the order of the AAC by which he has deleted the penalty imposed by the WTO under Section 18(1)(a) of the Wealth-tax Act, 1957 (''the Act").
2. From the orders of the authorities below the relevant facts, as obtained are that the assessee is the legal heir of late Shri Kapoorchand who died on 7-7-1972. The wealth-tax return was due to be filed on 31-7-1972. From the order of the WTO it is seen that the return was filed on 2-9-1975, i.e., there was a delay of 25 months.
Notice was issued by the WTO under Section 18(1)(a). From his order it is seen that the assessee was silent which, according to the WTO, would go to suggest that the assessee has without reasonable cause failed to file the return within the stipulated time. Accordingly, the WTO noted that he was satisfied that the assessee has without reasonable cause failed to furnish the return within the time and has committed a default under Section I8(1)(a) for which he was liable to penalty. He, therefore, imposed a penalty of Rs. 7,650.
3. On appeal by the assessee, the AAC noted the contention made on behalf of the assessee that the return was filed, as mentioned above, by the legal heir as and when he came to know about the liability to file the return. It was submitted that the legal heir was not liable to the penalty for the default which was committed by the deceased person, relying on the decision of the Hon'ble Andhra Pradesh High Court in the case of Smt. Yawarunnissa Begum v. WTO  100 ITR 645. Accordingly, the AAC cancelled the penalty. Hence, this appeal before us.
4. It is submitted by the learned departmental representative that there was no justification for the AAC to cancel the penalty in spite of the fact that there was a clear default of the assessee to file the return within the time and that in particular the delay was to the extent of 25 months. According to him, the default was committed by the assessee for which the penalty was correctly imposed by the WTO and the AAC went wrong in accepting or applying the ratio of the decision in the above Andhra Pradesh High Court case. It is submitted that on the facts of the case, the order of the AAC may be reversed and that of the WTO may be restored.
5. On the other hand, the assessee's learned counsel supports the order of the AAC, while contending that the default was that of the deceased and as such penalty cannot be imposed on the legal representative, as it has been done in the present case. It is submitted that the ratio of the above decision cited before the AAC was the correct law and in the further reliance the decision of the Hon'ble Madras High Court in the case of CWT v. Varadarajan  122 ITR 1014 is cited. Reliance is also placed on the decision of the Hon'ble Allahabad High Court in the case of Rameshwar Prasad v. CWT  124 ITR 77. In the course of the hearing, the assessee's learned counsel draws our attention to the commentary Verma on Wealth-tax, 2nd edition, page 1/551, in support of his contention that no penalty can be imposed on legal representative, when the default was that of the deceased person. It is submitted that since the default was admittedly of the deceased person, the present assessee should not be penalised. It is urged that the order of the AAC may be sustained.
6. We have perused the orders of the authorities below for our consideration along with the rival contentions of both the sides. As mentioned earlier, the deceased Kapoorchand died on 7-7-1972. The due date for filing of wealth-tax return for the assessment year 1972-73 was 31-7-1972. But on that due date, late Kapoorchand was no more, as he had died several days earlier. As such, as on the due date to file the wealth-tax return, late Kapoorchand was not there and, therefore, there cannot be any liability to file a return by the due date, although the valuation date might be earlier. Since late Kapoorchand had died before the due date for filing of the return, it cannot be said that he had committed the default. On his death, the properties of Kapoorchand came to the hands of the present assessee, Shri Ramrishpal.
In other words, the obligation to file the wealth-tax return for the assessment year 1972-73 relating to the assets left by late Kapoorchand would be that of the legal heir, if an assessee has filed return before the due date, he cannot be treated as a defaulter. The default would commence on or after the due date, although the valuation date might have been earlier to the due date. Liability to file wealth-tax return was only after the valuation date not even a day earlier to that, unlike income-tax in which liability to tax was assumed as the income is earned, although quantification of the tax may take place later on.
This also is the view of the Hon'ble Supreme Court in the case of CWT v. Suresh Seth  129 ITR 328/ 6 Taxman 35 in which, inter alia, it was held that where the default complained of is one falling under Section 18(1)(a), the penalty has to be computed in accordance with law in force on the last day on which the return, in question, had to be filed and that the default, if any, committed, is committed on the last date allowed to file the return. Therefore, liability to tax and liability to pay penalty cannot be treated on the same footing. We have considered the decisions relied on by the assessee, as discussed in the preceding paragraph. The ratio of those decisions, cited above, is not applicable to the facts of the case before us, as in those cases the default was established to have been committed by the assessee during his life time and the legal representative cannot be penalised for the default alleged to have been committed by the deceased during his life time. The facts of the case before us are distinguishable. As mentioned earlier, the deceased died before the due date for filing of the return. The liability to file wealth-tax return, therefore, devolves, as was the case of the properties, on the legal representatives. The obligation to file the return on the due date or on the date allowed by the WTO was that of the legal representative.
The WTO issued show cause notice to him before directing that penalty under Section 18(1)(a) should be paid by the present assessee. But from the order of the WTO it is seen that the assessee was silent. When no cause, whether reasonable or not, is shown, it implies that there was no cause for the delay in filing of the wealth-tax return in the present case.
7. At the same time, from the materials available and from the facts discussed above, it cannot be said that the penalty proceedings under Section 18(1)(fl) were pending at the time of the death of the deceased. In fact, the penalty proceedings, in question, commenced only after the due date and factually long after the death of late Kapoorchand. In this view of the matter, we are of the opinion that the AAC was not right in deleting the penalty as done by him in the present case. Accordingly, we reverse his order and restore that of the WTO.