M.R. Sharma, J.
1. Common questions of law and fact arise out of Wealth-tax References Nos. 1 and 2 of 1977, and they are being disposed of by this judgment.
2. The Income-tax Appellate Tribunal, Chandigarh Bench (hereinafter referred to as 'the Tribunal'), referred the following questions of law to us for our opinion, at the instance of the revenue.
'(i) Whether there was any material on the record to hold that there was no sufficient cause for filing the return in time ?
(ii) Whether the department discharged its onus of proving on the facts and circumstances of the case that the assessed consciously, intentionally or deliberately did not file the return ?'
3. The assessed put forth a plea before the Tribunal that he was not conscious of his obligation under Section 14(1) of the W.T. Act, 1957 (hereinafter referred to as 'the Act'), for filing the relevant returns. This plea was turned down by the Tribunal. An argument is raised on behalf of the assessee that merely because the explanation tendered by the assessee had been found to be unacceptable, it did not empower the authorities under the Act to impose a penalty on him. It has been submitted that Section 18 of the Act was a penal provision and the revenue had to lead some additional evidence to establish that the assessee had failed to furnish the return without reasonable cause. In this connection, reliance has been placed on a Division Bench judgment of the Calcutta High Court in CIT v. Bhuramal Manickchand : 121ITR840(Cal) . That was, however, a case of concealment of income and in that connection a Division Bench of the Calcutta High Court laid down that if the only evidence on record was the explanation submitted by the assessee, which had been found to be false, it did not constitute sufficient material for attracting the penalty provisions.
4. We need not emphasise that there is a clear distinction between the two defaults, namely, the failure to file a return and the failure to furnish correct particulars in the return filed. In the latter case, the assessee usually furnishes an explanation the correctness of which can be tested on the basis of some outside evidence. So far as the failure to file a return is concerned, the fact whether this failure was on account of some sufficient cause or not, is known to the assessee himself. In the latter case, when the explanation tendered by the assessee is found to be unacceptable, it wasopen to the authorities under the Act to come to the conclusion that there was no reasonable cause for the assessee to file the delayed return. In that event, a penalty could validly be imposed on him. This view finds ample support from a Division Bench judgment of this court in Smt. Kamla Vati v. CIT which, as a Bench of co-ordinate jurisdiction, we are bound to follow with respect.
5. For the reasons aforementioned, we answer the aforementioned two questions in the affirmative, i.e., in favour of the revenue and against the assessee. No costs.
Bhopinder Singh Dhillon J.
6. I agree.