Skip to content


Commissioner of Income-tax Vs. Mahatab Chand - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberWealth-tax Reference No. 383 of 1974
Judge
Reported in[1979]117ITR32(All)
ActsWealth Tax Act, 1957 - Sections 18(1)
AppellantCommissioner of Income-tax
RespondentMahatab Chand
Appellant AdvocateAshok Gupta, Adv.
Respondent AdvocateV.B. Upadhya, ;B.N. Dass and ;S.B.L. Srivastava, Advs.
Excerpt:
- - the various submissions were repelled, and varying amounts of penalty were imposed by an order dated january 2, 1971. the assessee went up in appeal, but failed. 5. in view of the divided success, the parties will bear their own costs......the tax, if any, payable by him' occurring in that section refers to the tax payable for which a demand notice is issued under section 156. it further held that the words 'the tax' occurring in the latter part of the provision also refer to the amount of tax referred to in the earlier part, namely, the amount of tax mentioned in the demand notice issued under section 156. in view of this decision we are unable to agree with the view taken by the tribunal that the amount in question has to be determined with reference to the tax still outstanding on the date on which the wto passes the penalty order. the crucial amount is that which is mentioned in the demand notice. the tribunal .has not, however, given the facts as to what was the amount of tax assessed on the quantum side and as to.....
Judgment:

Satish Chandra, J.

1. For the five assessment years 1965-66 to 1969-70, the assessee filed his return under the W.T. Act on 28th February, 1970. The same day the WTO passed an assessment order accepting the wealth returned for each of the five years. Subsequently, he issued a notice proposing to impose penalty on the assessee. In response, the assessee appeared and made several submissions as to why the returns were filed with delay. The various submissions were repelled, and varying amounts of penalty were imposed by an order dated January 2, 1971. The assessee went up in appeal, but failed. He then went up to the Tribunal. The Tribunal, relying on the decision of the Calcutta High Court in the case of CIT v. Vegetable Products Lid. : [1971]80ITR14(Cal) and also of the Delhi High Court in the case of CIT v. Hindustan Industrial Corporation : [1972]86ITR657(Delhi) held that the phrase 'tax, if any, payable by him' occurring in Section 18(2)(i) of the W.T. Act means the tax outstanding on the date the penalty order was passed. Holding that in fact there was no tax outstanding at that time it cancelled the imposition of penalty.

2. At the instance of the department, the Tribunal has referred the following questions of law for our opinion :

'1. Whether, on the facts and in the circumstances of this case, the Tribunal was legally correct in holding that the penalty under Section 18(1)(a) is to be imposed with reference to the tax due from the assessee at the time of imposition of penalty ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in cancelling penalties of Rs. 1,735, Rs, 3,348, Rs. 5,325, Rs. 6,111 and Rs. 4,237 levied by the WTO under Section 18(1)(a) of the W.T. Act, 1957, for the assessment years 1965-66, 1966-67, 1967-68, 1968-69 and 1969-70 respectively ?'

3. There is no doubt that the provisions of Section 18(l)(i) of the W.T. Act are identical in language with Section 271(l)(i) of the I.T. Act. The provisions of the I.T. Act came up for consideration before the Supreme Court in the case of Vegetable Products Ltd. : [1973]88ITR192(SC) , which was an appeal from the decision of the Calcutta High Court mentioned above. After discussing the pros and cons of the contentions, the Supreme Court ultimately held that the phrase 'the amount of the tax, if any, payable by him' occurring in that section refers to the tax payable for which a demand notice is issued under Section 156. It further held that the words 'the tax' occurring in the latter part of the provision also refer to the amount of tax referred to in the earlier part, namely, the amount of tax mentioned in the demand notice issued under Section 156. In view of this decision we are unable to agree with the view taken by the Tribunal that the amount in question has to be determined with reference to the tax still outstanding on the date on which the WTO passes the penalty order. The crucial amount is that which is mentioned in the demand notice. The Tribunal .has not, however, given the facts as to what was the amount of tax assessed on the quantum side and as to when it was paid and what was the amount mentioned in the demand notice issued by the WTO. These facts will, however, be found by the Tribunal after the matter goes back to it as a result of our answer.

4. We, therefore, answer the questions referred to us by holding that the penalty under Section 18(1)(a) is to be imposed with reference to the tax mentioned in the demand notice. We return question No. 2 unanswered, because the answer to it will depend upon the facts that have not yet been found and which will be found by the Tribunal hereafter.

5. In view of the divided success, the parties will bear their own costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //