1981 (6) TMI 74 - AT - Wealth-tax

Summary

Issues:
Interpretation of maintainability of appeal against penalty order under section 18(1)(a) of the Wealth Tax Act, 1957 despite rejection of voluntary disclosure petition under section 18(2A) by the Commissioner of Wealth Tax.

Analysis:
The Revenue filed applications before the Appellate Tribunal under section 27(1) of the Wealth Tax Act, 1957, seeking reference of a question of law arising from the Tribunal's order. The question pertained to the justification of the Tribunal in holding that an appeal before the AAC was maintainable against the WTO's penalty order under section 18(1)(a) despite the rejection of the normal voluntary disclosure petition under section 18(2A) by the CWT. The Tribunal, comprising Members P. L. Kanojia and B. L. Maurya, declined to draw up a statement of the case as they found no question of law arising from the Tribunal's order.

For the assessment years in question, the assessee filed returns late, leading to penalty proceedings initiated by the WTO. The assessee argued that it was unaware of its wealth tax liability until receiving a valuation report, which prompted the belated filing of returns. However, the WTO rejected the explanation, holding the assessee in default and imposing penalties for the respective years.

The AAC of Wealth Tax upheld the penalties, citing the rejection of the voluntary disclosure petition by the CWT under section 18(2B) for certain years due to non-payment of taxes. The AAC concluded that the penalties were justified based on the CWT's order and dismissed the appeals.

Upon further appeals, the Tribunal found in favor of the appellant, stating that the penalties were imposed by the WTO independently of the CWT's order under section 18(2A). The Tribunal disagreed with the AAC's reasoning and set aside the orders, directing a fresh disposal of the appeals on merits.

The Tribunal emphasized that the appeals were to be decided on their merits by the AAC, without any bar imposed by section 18(2B) on the AAC's powers to consider the appeals. The Tribunal deemed the proposed questions of law academic, as the appeals were to proceed based on its directions to the AAC for fresh disposal on merits.

In conclusion, the Tribunal rejected the Revenue's applications, maintaining that the AAC should decide the appeals on merits as directed by the Tribunal, rendering the proposed questions of law unnecessary for reference to the High Court. The Tribunal clarified that the rejection of the voluntary disclosure petitions by the CWT did not preclude the AAC from considering the appeals against the penalties imposed by the WTO.