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2. The authorities below are not justified in levying interest under Section 17B of the Act, especially by an order under Section 35 of the Act, in respect of an assessment concluded under Section 16(3) by issuance of a notice under Section 17 of the Act, while the levy of interest under Section 17B is debatable in nature and cannot be levied under Section 35 of the Act.
3. Without prejudice to the above, the authorities below have erred in law in levying interest under Section 17B in respect of an assessment processed by the issue of notice under Section 17 of the Act and therefore, no interest under Section 17B can be levied since the assessment has not been completed under Section 16(5) and further that the return which was filed is non est in law which was regularized by notice under Section 17 of the Act and there was no delay in filing the return in response to notice under Section 17 of the Act.

5. The assessment year involved in all these cases is 1991 -92, for which the due date for filing of net wealth under Section 14 was 30th June, 1991. According to Shri Venkatesan, in terms of notice under Section 16(4) issued to the assessees, the due date for filing was 31st March, 1993. The assessees actually filed the returns in pursuance of the notice under Section 17 issued on 13-12-1994. The assessees had actually filed the returns on 15-2-1994, but these returns were treated as non est in law as filed beyond time. However, on receipt of notices under Section 17, the assessees requested the Assessing Officer by a letter dated 26-12-1994 to treat the returns already filed as pursuant to the notices under Section 17. In the assessment orders passed on 28-2-1997, the Assessing Officer adopted the net wealth as per returns filed and as reduced further in accordance with the request contained in the assessee's letters filed subsequently. In the orders passed on 28-2-1997, the Assessing Officer did not levy any interest under Section 17B for delayed filing of the returns. However, realising the omission to charge interest, the Assessing Officer issued notice under Section 35 for rectification of the assessment orders and in the proceedings dated 2-9-1998, he levied interest under Section 17B. The details of the net wealth assessed, tax thereon, prepaid taxes, interest levied under Section 17B, are as under:

9. From the above, it is clear that interest under Section 17B is attracted in a case where the return of net wealth is furnished after the due date or where no such return is filed before the completion of the assessment. In the present case, the assessees did file the return of net wealth on 15-2-1994 as against the due date of 30th June, 1991. Thus, apparently, there is a delay in filing the returns. The argument of the learned counsel for the assessee that since the returns were considered non est in law, they do not come within the purview of Section 17B(1) does not hold water. Sub-section (3) of Section 17B is attracted only in a case where assessment has been done originally and return is filed subsequently in pursuance of notice under Section 17. No doubt Sub-section (3) does not apply to the facts of the case as in the present cases assessments have been done for the first time and, therefore, we have to see the applicability of Sub-section (1) of Section 17B which envisages the following situations :

10. When the assessees were served with notices under Section 17, they requested, by a letter dated 26-12-1994 to treat the returns originally filed on 15-2-1994 as filed in pursuance to notice under Section 17. This means that the returns filed on 15-2-1994 have been regularized and treated as the returns for the purpose of the assessment under Section 17. Since these assessments were made for the first time, they are regular assessments made under the Act. Therefore, we have to proceed to the assumption that a regular assessment has been completed under the Act and all natural consequences of such assessment will have to follow under the different sections of the Act. No doubt, assessment implies not only the determination of net wealth liable to be taxed under the Act, but also the wealth-tax payable by the assessee on the net wealth assessed including liability to interest under Section 17B, if chargeable. The intention of the Legislature in enacting the provisions of Section 17B is crystal clear. It is to levy interest which is compensatory in nature for withholding the revenue due to the Government on account of delay in filing the return of net wealth. In the present case, such a delay has occurred on the part of the assessees in not filing the returns of net wealth on or before the due date, i.e., 30th June, 1991. The assessees chose to do so only on 15-2-1994. The returns disclosed substantial net wealth assessable to tax. Consequently, there is a delay in the filing of the return during the period between the aforesaid dates. Hence, interest is clearly chargeable under Section 17B. In the circumstances, we conclude that the Assessing Officer has rightly invoked his jurisdiction under Section 35 in levying the interest under Section 17B which is mandatory under the provisions of the Act. The CWT(A) is justified in dismissing the appeal not only in limine for non-payment of admitted tax under the provisions of Section 23(2A) (which is also mandatory and does not admit of any discretion on his part to waive this condition), but also on merits of the case with regard to the leviability of interest under Section 17B. We fully endorse the reliance placed by the learned CWT(A) on the following case laws in buttressing his conclusions: