TMI Blog2012 (9) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... t the presumption, perhaps the situation would have been different. - TAX APPEAL No. 145 of 2000, TAX APPEAL No. 147 of 2000 - - - Dated:- 24-7-2012 - MR.JUSTICE AKIL KURESHI, MS.JUSTICE HARSHA DEVANI, JJ. MR BANDISH SOPARKAR WITH MR SN SOPARKAR, SR COUNSEL for Appellant(s) MR MANAV A MEHTA for Opponent(s) JUDGMENT ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. These appeals arise out of a common judgement of the Income Tax Appellate Tribunal( the Tribunal for short) dated 29.2.2000. They have been heard together and are being disposed of by this common order. 2. At the time of admission of this appeal common substantial question of law framed by the Division Bench was as under : "Whether in the facts and circumstances of the case the Tribunal was right in law in sustaining the levy of penalty under Section 18(1)(c) and in doing so ignored the assessment case under the Wealth Tax Act of the same assessee and of his brother? 3. Brief facts may be noted from Tax Appeal No.147/2000. Assessee is an HUF. Assessment year under consideration is 1986-1987. For such assessment year, the assessee had not filed its return of wealth thou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s part. The assessee also contended that when the Assessing Officer brought to its notice the provisions of rule 1BB, the assessee calculated and submitted statement of valuation on that basis upon which the assessment was framed adopting such valuation. 3.3 The Appellate Commissioner dismissed the assessee's appeal. In such appellate order he accepted the assessee's contention that there was a bona fide difference of opinion regarding the valuation of the immovable property. He however, proceeded to confirm the penalty on the basis of explanation (4) to section 18(1)(c) of the Act. 3.4 Such order of the Commissioner(Appeals) was challenged by the assessee before the Tribunal. The Tribunal upheld such order and held that in view of clear provisions contained in explanation(4) to section 18(1)(c) of the Act, the contentions of the assessee cannot be upheld. 4. Facts are identical in both the appeals. They are therefore, not separately noted with respect to Tax Appeal No.145/2000. 5. Learned counsel Shri Bandish Soparkar for the appellant submitted that the assessee having filed the return and having disclosed full particulars of the immovable properties exigible to wealth ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn as compared to valuation accepted in the final order of assessment far exceeded the permissible margin provided under explanation(4) of section 18(1)(c) of the Act. The Assessing Officer therefore, rightly imposed penalty which was upheld by the Appellate Commissioner and the Tribunal. Counsel relied on decision of the Madras High Court in case of V.G. Paneerdas and Co. P. Ltd. v. Commissioner of Wealth-tax reported in (2006) 284 ITR 444(Mad), wherein the High Court upheld the penalty where the assessee has filed nil return and eventually it was found that the assessee had sizable wealth. 7. Having heard learned counsel for the parties and perused the documents on record, we may notice the statutory provisions first. Section 18(1)(c) of the Act provides for penalty in case an assessee has concealed the particulars of any assets or furnished inaccurate particulars of any assets or debts. Explanation(4) to said subsection provides that 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 17, such person shall be deemed to have furnished inaccurate particulars of such asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s be so, we fail to see how the penalty could be sustained. It is not in dispute that the assessee did file return and gave full particulars of the assets held. This was therefore, not a case of assessee concealing the particulars of the assets. Assessing Officer however, did in the earlier part of the order briefly touch on the question of valuation of the assets. His ultimate order however, was not on the basis of any inaccurate particulars supplied by the assessee. In this respect we may peruse the decision of this Court relied upon by the counsel for the appellant. In case of New Sorathia Engineering Co.(supra), Division Bench of this Court relied on and referred to earlier decision in case of Manu Engineering Works (supra) and deleted penalty making following observations : The penalty order and the order of Commissioner (Appeals) show that no clear-cut finding has been reached. The Tribunal has failed to appreciate this legal issue. Applying the ratio to the facts of the case it is apparent that the order of penalty cannot be sustained and the Tribunal could not have sustained the same. The Tribunal having failed to take into consideration and deal with the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee would be visited with penalty by virtue of deeming fiction created in explanation(4) of section 18(1)(c) of the Act. It was the Commissioner(Appeals) who for the first time at the appellate stage realized that case may fall within such explanation. When we are dealing with penalty proceedings, which are quasi criminal in nature, we must put the Revenue to strict compliance of the legal requirements. 12.We may notice that explanation(4) of Section 18(1)(c) of the Act though does give rise to a presumption under certain circumstances, such presumption is not irrebuttable. The rebuttable can come in the form of assessee being able to prove that valuation of the assessee as returned by him is the correct value of the asset. It is of-course true that if the returned value of assets is less than 70% of the value of such assets as determined in the assessment framed under section 16 or 17 of the Act and also if the assessee did not prove that the value of the asset as returned by him is the correct value, such a situation would give rise to a deeming fiction and the Assessing Officer would presume that the assessee had furnished inaccurate particulars of such assets within the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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