TMI Blog1981 (4) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... able property at their cost price and not on the market price on the valuation dates. She, therefore, invoked the provisions of Expln. (1) appended to s. 18(1)(c) as the net wealth returned fell short of 75 per cent. of the net wealth assessed and held that the assessee had failed to show that there was absence of any fraud or gross or wilful neglect in not returning the wealth. She, therefore, held that the assessee committed the default in each of the years under s. 18(1)(c). In respect of the quantum of penalty to be imposed, she pointed out that the assessee had applied to the Commissioner of Wealth-tax under s. 18(2A) for a waiver of penalty and the Commissioner of Wealth-tax had reduced the penalty to 5 per cent. of the minimum amount leviable or otherwise. The IAC, therefore, imposed the penalties at 5 per cent. of the minimum penalty imposable respectively in those years. Being aggrieved by the order of the IAC, the assessee went up in appeal before the Tribunal. At the time of hearing of the appeal, the Tribunal was of the view that in view of s. 18(2A) read with s. 18(2B), no appeal, in the facts and circumstances of the case, lay. In the premises, the appeal was dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cl. (i) certain amount is fixed and in the case of cls. (ii) and (iii) certain other amounts are fixed. We are not concerned with the details of the other provisions. Sub-section (2A) along with sub-s. (2B) was introduced by the Finance (No. 2) Bill of 1965 and sub-ss. (2A) and (2B) were incorporated. The said sub-sections after the incorporation of sub-ss. (2A) and (2B) read as follows: " (2A) Notwithstanding anything contained in clause (i) or clause (iii) of sub-section (1), the Commissioner may in his discretion, (i) reduce or waive the amount of minimum penalty imposable on a person under clause (i) of sub-section (1) for failure, without reasonable cause, to furnish the return of net wealth which such person was required to furnish under sub-section (1) of section 14, or (ii) reduce or waive the amount of minimum penalty imposable on a person under clause (iii) of sub-section (1), if he is satisfied that such person (a) in the case referred to in clause (i) of this sub-section has, prior to the issue of notice to him under sub-section (2) of section 14, voluntarily and in good faith, made full disclosure of his net wealth ; and in the case referred to in clause ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not at an ad hoc concessional rate. Further, facilities will be allowed for the payment of tax in appropriate instalments extending over a period not exceeding four years, subject to a down payment of not less than 10 per cent. of the tax due and furnishing of security in respect of the balance. Income which has already been detected on materials available prior to the date of the disclosure will, however, be assessed under the regular provisions of the. Income-tax Act and not under this scheme. Any admissions made by a person in the declaration filed by him under the scheme in respect of" such income will not be used against him in assessing that income under the Income-tax Act. Under this scheme also, the disclosed income will not be subject to any further proceedings of assessment. The identity of the declarant will not be revealed and he will also be immune from penalty and prosecution for the past concealment of the disclosed income. " In the Memorandum explaining the provisions of the Bill, it has been stated that a certain amendment of the W.T. Act, 1957, was proposed on account of default in furnishing a return or concealment of assets in the cases of voluntary disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant year. Such a person will also be granted immunity from prosecution in respect of any false statement in the relevant return in regard to the voluntarily disclosed net wealth." We have already referred to s. 18(1), (2A) and (2B). It is now necessary to refer to s. 24 which deals with an appeal. Section 24 provides for an appeal and sub-s. (1) of s. 24 is as follows: "24. (1) An assessee objecting to an order passed by the Appellate Assistant Commissioner under section 18 or section 23 or sub-section (2) of section 37 or to an order passed by the Inspecting Assistant Commissioner under sub-section (3) of section 18, may appeal to the Appellate Tribunal within sixty days of the date on which the order is communicated to him." Sub-section (5) of s. 24 is as follows: " 24. (5) The Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, and any such orders may include an order enhancing the assessment or penalty ........ We are not concerned with the proviso. Section 25 deals with the powers of the Commissioner to revise an order of assessment and, inasmuch as certain submissions were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s decision or at the date of filing of the appeal. The Supreme Court further reiterated that the vested right of an appeal could be taken away by subsequent enactment if it so expressly provided or by necessary intendment and not otherwise. This proposition again cannot be disputed but we are not concerned with this controversy. To the similar effect reliance was placed on the observation of the Supreme Court in the case of Custodian of Evacuee Property v. Khan Saheb Abdul Shukoor, AIR 1961 SC 1087. Reliance was also placed on the observation of the Supreme Court in the case of CIT v. Bhikaji Dadabhai Co. [1961] 42 ITR 123. In so far as learned advocate for the assessee contended that a right of appeal was a substantial right and should not be so construed as to be taken away unless it was so expressly provided or it follows as a necessary implication of the statute, it cannot be disputed. It is also indisputable that such provision for appeal or a remedial provision should be construed favourably in favour of the right if such a right existed and if it is so possible to construe. But the question here is giving a harmonious construction to sub-ss. (2A) and (2B) of s. 18 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot property or validly exercised. Learned advocate for the assessee contended that an assessee could make an application before the Commissioner even after preferring an appeal. If that was so, he further submitted that, in such a case an assessee who prefers an appeal and an assessee who prefers to go to the Commissioner would be treated in different manner and that would be discriminatory. It is not quite correct to read the provision in such a manner. The position is that if an order is passed by the Commissioner, it must be that, the penalty was imposable, but the quantum of the penalty would be dealt with by the Commissioner in his order. But if subsequent to the appellate order an assessee goes before the Commissioner, then he can certainly ask, if he fulfils the conditions required for the discretion of the Commissioner as stipulated in s. 18(2A), for a waiver of the penalty. The appellate authority normally would not be concerned with it. This, in our opinion, would be a harmonious construction of the different provisions of s. 18(2B) read with s. 18(2A). Otherwise, the exercise of the power by the Commissioner under sub-s. (2A) of s. 18 would be futile and an empty exerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at p. 189 of the report that if there was no valid order of the Commissioner, the next question that would arise was, what was the status of the order of the WTO dated 28th September, 1971. So, in such a case, an appeal would lie. So the observations that were made in that decision would not be really applicable in the facts and circumstances of this case because those observations were on the basis that there was no order of the Commissioner under s. 18(2A). But, in the instant case, there is an order of the Commissioner under s. 18(2A) and that is not in dispute here. Reliance was also placed on the observations of the Rajasthan High Court in the case of Indra Co. v. CIT [1980] 122 ITR 510. There, the court held that an application for a waiver or reduction of penalty could be made even after the confirmation of the penalty order by the appellate authorities. With this observation we are not in disagreement but this observation does not really help us in resolving the present controversy. Similarly, our attention was drawn to the observations of the learned single judge of the Karnataka High Court in the case of B. Anjanappa v. CWT [1980] 124 ITR 433, where at p. 437, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r under s. 18(2A) of the W.T. Act, 1957, was only to reduce or waive the amount of minimum penalty imposable on a person under cl. (i) or cl. (iii) of subs. (1) of s. 18. The power could be exercised by the Commissioner notwithstanding the default and there being no reasonable cause for the failure to furnish the return within the time prescribed. The question, the court observed, of the existence of a reasonable cause was not within the ambit of s. 18(2A); that inheres in the WTO. The opening words of the section also indicated that it was only notwithstanding anything contained in cl. (i) or cl. (iii) of sub-s. (1) of s. 18 and notwithstanding any other provision in the Act that the Commissioner could act. The provision did not override or obliterate the jurisdiction conferred on the other authorities under the Act. The court further observed that, under s. 18(2B), what was made final was the order made under s. 18(2A), i. e., in regard to the quantum of minimum penalty that was directed to be waived or reduced and nothing more. There was no provision that once the assessee filed an application under s. 18(2A) before the Commissioner he waived his other rights. With great respect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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