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TMI Blog2004 (8) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... ustified in law in holding that immunity was available against penalty with reference to the wealth disclosed in whomsoever's hands it came up for consideration?" 2. Whether, on the facts and in the circumstances of the cases, the Appellate Tribunal was justified in law in cancelling the penalties imposed by the Wealth-tax Officer under section 18(1)(a) of the Wealth-tax Act, 1957, for the assessment years 1964-65, 1965-66 and 1966-67 in question?" Briefly stated, the facts giving rise to the present reference are as follows: The assessee is Jangi Lal Hindu undivided family. For the assessment years in question, returns of wealth became due on the June 30, each year. However, all the returns were filed by the assessee on December 31, 197 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alth-tax Officer on the ground that it was in the sole discretion of the Wealth-tax Officer to accept or not to accept them to be declarations and that since he did not accept them to be full and true, no discretion could be given to him to grant immunity to the assessee. The Appellate Assistant Commissioner also did not accept the alternative submission raised before him. Feeling aggrieved, the assessee preferred an appeal before the Appellate Tribunal. The Appellate Tribunal was of the view that as a fact the disclosures were accepted and immunities were earned. It also held that if, in terms of section 15 of the Act of 1976, the immunity was earned and the values declared were not to be considered for the purposes of section 18(1)(a) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) of the Voluntary Disclosure of Income and Wealth Ordinance, 1975, and disclosed a net wealth of ... The assessee will be given immunities to this extent as laid down under the disclosure scheme." The Tribunal has further held that the assessee is entitled for the immunity to the extent of the wealth disclosed under the disclosure scheme. For a proper appreciation of the issues involved in the present reference, sections 15 and 18 of the Act of 1976 are reproduced below for ready reference: Section 15 of the Act is reproduced below: "15. Voluntary disclosure of wealth-(1) Subject to the provisions of this section, where any person makes, on or after the date commencement of this Act but before the 1st day of January, 1976, a declarati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under sub-section (1) shall be signed by the person specified in sub-section (2) of section 4 as if the declaration has been made under that section. (4) A copy of the declaration made by the declarant under sub-section (1) shall be forwarded by the Commissioner to the Wealth-tax Officer and the information contained therein may be taken into account for the purposes of the proceedings relating to assessment or reassessment of the net wealth of the declarant under the provisions of the Wealth-tax Act. (5) The immunity provided under sub-section (1) shall not be available to the declarant unless the wealth-tax chargeable in respect of the net wealth for the assessment year or years for which the declaration has been made is paid by the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent, of the amount of net wealth declared under clause (a) of sub-section (1), or, as the case may be, the value declared under clause (b) of that sub-section; (b) where the declaration has been made in respect of more than one assessment year, a sum equal to two and a half per cent, of the net wealth declared under clause (a) of sub-section (1) or, as the case may be, the value declared under clause (b) of that sub-section, in respect of the last of such assessment years. (7) Where any wealth-tax is paid by the declarant for any assessment year in accordance with the provisions of section 5, read with sub-section (5) of this section, credit therefor shall be given to the declarant in the assessment made under the Wealth-tax Act for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the immunity provided under section 15 read with section 18 of the Act will not be available to the assessee-Hindu undivided family up to the assessment year 1966-67. In the case of Addl. CIT v. Kanhaiyalal Jessaram [1977] 106 ITR 168, the Madhya Pradesh High Court has held that even if the offer for settlement is not accepted and if the Department insists on deciding the assessment case on the merits, any facts said to be disclosed in such offer have to be altogether excluded and then it becomes incumbent on the Department to resort to the usual assessment or the best judgment assessment, as the case may be, and in that event the Department would be empowered to impose the minimum penalty imposable under the section. We are in full agr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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