1. The revenue has filed these appeals against the orders of the Commissioner (Appeals) holding that the case did not fall in the ambit of Explanation 4 to Section 18(1)(c) of the Wealth-tax Act, 1957('the Act') and, consequently, in cancelling the penalties levied by the WTO under Section 18(1)(c) for each of the six years under consideration.
2. During the years under consideration, the assessee's wealth consisted of one-fourth share in an immovable property known as Harilela House and also a Flat No. 51A in Anita Apartments, Mount Pleasant Road, Bombay. The assessee disclosed the value of the one-fourth interest in the Harilela House at Rs. 1,54,528 for each of the six years. The WTO, however, valued this one-fourth interest at Rs. 4,12,685 for the first two years, at Rs. 4,18,445 for the next three years and at Rs. 4,14,645 for the last year under consideration. He valued this property as per the departmental Valuation Officer's report under Section 16A of the Act. Likewise, in respect of the flat in the Anita Apartments, the assessee disclosed the value of the flat at Rs. 60,000 for each of the years whereas the WTO valued this flat at Rs. 1,32,000 for the first two years and at Rs. 1,23,000 for the remaining four years under consideration. In consequence of the difference in the values of these two. assets, there was a wide gap between the net wealth as declared and assessed as detailed below.Assessment year Declared wealth Assessed wealth The assessee did not appeal against these assessments. When called upon to show cause why no penalty should be levied for the concealment of wealth, the assessee explained that there was no concealment of wealth.
The difference between the declared and assessed wealth arose on account of the difference in the valuation of the two immovable properties. According to the WTO, proviso to Section 18 clearly stated that the difference exceeding 25 per cent was considered to be deemed concealment. As the assessee had not filed any appeal and had accepted the value assessed, he proceeded to levy the penalties under Section 18(1)(c) which are as under: 3. The assessee appealed against the penalties levied by the WTO before the Commissioner (Appeals) on various grounds. During the course of the appeal proceedmgs, among various arguments made before the Commissioner (Appeals), it was brought to the notice of the Commissioner (Appeals) that there was no concealment of any wealth by tne assessee. The assessee was a co-owner of the property along with the wives of the brothers of the assessee's husband, who were" all partners in the firm of Harilela, Opposite GPO, Bombay. The assessee held a British passport and was permanently residing at Hong Kong. Both the properties were rented out. For attending to the wealth-tax affairs of the assessee the assessee had appointed Shri B.G. Gandhi, a senior chartered accoutant, to look after the taxation matters. The returns were being filed by Shn Ishwardas Valiram Mahbubani, another co-partner in the firm of Hariela.
The assessment proceedings were being attended to by Shri B.G Gandh, Even Shri B.G. Gandhi had not acted wantonly in declaring . any value of the properties as he chose. He declared the value of the interest in the Harilela house as per the cost of the building as debited to the books of account in the firm of Harilela from which books the cost of the building was paid. Declaration of the value of an asset at cost was a recognised method of valuation. Therefore, there was no fraud involved in the declaration of the value of these assets. As regards the flat in the Anita Apartments, the flat was valued by one Shri D.H.Rajani, the registered valuer, at Rs. 59,200 for the years under consideration. Actually the assessee had declared the value of this flat at Rs. 60,000, which was higher than the value as determined by the registered valuer. Thus, it was clear that even in respect of this flat there was no fraud or wilful neglect on the part of the assessee.
The Commissioner (Appeals) accepted the arguments on behalf of the assessee that the assessee had not concealed any particulars of her wealth nor had she furnished any inaccurate particulars. Therefore, there was no fraud by her. Insofar as she had engaged a chartered accountant to represent her case, which itself showed a diligence, there was no gross or wilful neglect. Then again, according to the learned counsel, she had not given the valuation of either property at an arbitrary figure but only the cost has been taken in respect of the first property and a valuation by a registered valuer in respect of the second property. According to the Commissioner (Appeals), it was clear that there was only a bona fide difference of opinion, which could not be considered as concealment of any wealth by any stretch of imagination. That such a difference of opinion, could arise unintentionally was clear from the fact that the valuation of the first property by the registered ft valuer was less than the cost disclosed by the assessee and the second property's valuation was more than the cost shown by the assessee. In the circumstances, the Commissioner (Appeals) disagreed with the WTO that (the assessee had deliberately, knowingly and wilfully undervalued the properties owned by her. Since there was no element of deliberateness in the returns filed by the assessee, the Commissioner (Appeals) proceeded to hold following the Supreme Court decision in the case of Cement, Marketing Co. of India Ltd. v. Asstt. CST  124 ITR 15 that the assessee could not be said to have filed false returns and thus, penalty could not be impose i on the assessee for all the years under consideration.
4. The revenue is, as stated earlier, in appeal before the Tribunal on the common ground that the Commissioner (Appeals) erred in holding that the case did not fall within the ambit of Explanation 4 to Section 18(1)(c) and in consequently cancelling the penalties levied by the WTO under Section 18(1)(c). During the course of the hearing of the appeals, the learned departmental representative proceeded to support the appeals on the plea that the Commissioner (Appeals) had proceeded to allow the appeals on wholly irrelevant considerations, such as wilfulness or delibe-rateness or fraudulent behaviour on the part of the assessee. The learned departmental representative was at some pains to take us through the provisions of the Act particularly Explanation 4 to Section 18. He read out the Explanation 4 to Section 18, which reads as under: Where the value of any asset returned by any person is less than seventy per cent of the value of such asset as determined in an assessment under Section 16 or Section 17, such person shall be deemed to have furnished inaccurate particulars of such asset within the meaning of Clause (c) of this sub-section, unless he proves that the value of the asset as returned by him is the correct value." According to the learned departmental representative, the moment it was found that the value of any asset as returned by an assessee was less than 70 per cent of the value of such asset determined in an assessment, such person shall be deemed to have furnished inaccurate particulars of such assets within the meaning of Section 18(1)(c) unless he proved that the value of such asset returned by him was the correct value. He referred us to the difference between the declared value of the assets for each of the six years and the assessed values.
The case was patently covered by Section 18(1)(c) read with the Explanation referred to earlier. The burden lay heavily on the shoulders of the assessee to prove that the value as declared by her of these assets was the correct value. In this connection, he also referred to the Punjab and Haryana High Court decision in the case of Vishwakarma Industries v. CIT  135 ITR 652 (FB).
5. On behalf of the assessee, the learned counsel proceeded to point out that the law to be applied for the levy of penalty was the law on the dates on which the offence of concealment was alleged to have been committed by the assessee. According to the learned counsel, this dictum was laid down by the learned Judges of the Supreme Court in the case of Brij Mohan v. CIT  120 ITR 1. Then he proceeded to point out that the returns in this case were filed on the following dates;Assessment year Date of filing of the return According to the learned counsel, if at all there was any concealment, the concealment was committed by the assessee on the aforesaid dates.
Therefore, we have to ascertain the law as on these dates for considering the exigibility of the assessee to penalties. He pointed out that the relevant provision of Section 18, as it stood prior to its amendment by the Taxation Laws (Amendment) Act, 1970, with effect from 1-4-1971, was to the effect that where the value of any asset returned by any person was less than 75 per cent of the value of such asset determined in the assessment, such person, unless he proved that the failure to return the correct value of the asset did not arise from any fraud or any gross or wilful neglect on his part, shall be deemed to have concealed the particulars of such asset for the purposes of Section 18(1)(c). Even after the amendment of the relevant provisions with effect from 1-4-1971, the law on the subject was unaffected.
Section 18, after its amendment by the Taxation Laws (Amendment) Act, 1975, with effect from 1-4-1976, had undergone substantial change. This amendment placed on the statute book the Explanation 4 which was sought to be applied by the WTO and sought to be substantiated by the learned departmental representative in the course of his arguments. The Explanation has been reproduced earlier in this order. According to the learned counsel, all that the assessee was called upon to show was that the failure to declare the correct value of the assets did not arise from any fraud or gross or wilful neglect on her part. Thereafter, the learned counsel proceeded to invite our attention to the dictionary meaning of the words 'fraud' and 'wilful' as in the commentary on Wealth-tax by Varma (1982), 2nd edition at pages 589 and 590 of the commentary. Further, he has referred us to the meaning of these two terms as per the Webster's English Dictionary (Collegiate Dictionary--Fifth edition), according to which the word 'fraud' meant (1) Deceit; trickery. (2) Artifice; trick (3) Colloq. A cheat; impostor. (4) Law; an intentional perversion of truth to induce another to part with some valuable thing belonging to him, or to surrender a legal right. Syn. Deception, guile, subtlety, craft; wile, sham, fake.
The word 'wilful', according to this Dictionary, meant (1) Self-determined; intentional; as, wilful murder. (2) Governed by will without yielding to reason; obstinate; stubborn; as, a wilful man or horse--Syn. See Wayward--wilfully, wilful, ly. adv. wilfulness, wilfulness, n. As to the reliance on behalf of the revenue on the Punjab and Haryana High Court decision in the case of Vishwakanna Industries (supra) the learned counsel submitted that that decision helped the assessee's case more than the department's case. Further, on this question, he referred to another decision of the Punjab and Haryana High Court decision in the case of CWT v. Tej Pal Oswal  112 ITR 429 where the learned Judges of that High Court held that where penalty was cancelled by the Appellate Tribunal on the finding that there was a bonafide difference of opinion between the assessee and the WTO on the question of valuation of shares and that the assessee had discharged the burden laid on him by Section 18(1)(c) the Tribunal had not made any mistake.
6. The learned departmental representative, on rejoinder, submitted that the assessee had at least in respect of the first property, viz., the Harilela House, mechanically reproduced the value of the property as recorded in the books of account in the returns of wealth. The assessee had not discharged the onus of getting the property valued before submitting the returns of wealth. Therefore, even according to the law, as pointed out on behalf of the assessee, the assessee was guilty of the misconduct referred to in Section 18(1)(c).
7. We have carefully considered the facts and circumstances of the case and the submissions on either side. The fact is that the assessee owned two assets on each of the six valuation dates, a share as a co-owner in the Harilela House and a flat in the Anita Apartments. She declared the value of the first asset as per the cost as recorded in the books of account. The value of the second asset was declared slightly higher than the value as ascertained by a registered valuer. Later on, the properties came to be valued by Valuation Officer of the income-tax department under Section 16A who valued the properties substantially higher. The question is whether in the circumstances, it could be said that the assessee had concealed the particulars of wealth or deliberately furnished inaccurate particulars of wealth as laid down in Section 18(1)(c). As explained by the learned Judges of the Supreme Court in the case of Brij Mohan (supra), the law to be applied was the law as on the date on which the offence of concealment was committed.
According to us, the assessee committed-the offence of concealment, if at all, while filing the returns of wealth. The dates have been reproduced earlier in this order. Each of these dates falls in the period prior to 1-4-1976. Prior to 1-4-1976, the Explanation 4, on the basis of which the revenue has filed the appeals, was not on the statute book. On this short ground itself the appeals filed by the revenue are liable to be rejected. Even if we proceed according to the law as on the relevant dates, all that the assessee was expected to establish was that the failure to return the correct value of the asset did not arise from any fraud or any gross or wilful neglect on her part. Neither the WTO in the penalty orders under consideration nor the learned departmental representative in the course of his arguments before us has been in a position to establish that either there was any fraud or any gross or wilful neglect on the part of the assessee.
Further, the assessee has fully discharged the onus resting on her shoulders in this respect. She was a non-resident residing in Hong Kong all the time. She had entrusted the drawing of the return to a senior chartered accountant. There is no doubt about his competence to draw up the return of wealth. He has declared the value of one of the assets at cost and the value of the other assets at slightly higher than the value ascertained by a registered valuer. The return has been signed by the constituted attorney, who is the asses-see's husband's partner. In our opinion, the assessee cannot be accused of any fraud or any gross or wilful neglect in the filing of the returns. In the circumstances, the Commissioner (Appeals) was fully justified in acquitting the assessee of the charge of concealment of wealth and cancelling the penalties. The orders of the Commissioner (Appeals) are upheld and the appeals filed by the revenue are dismissed.