2004 (3) TMI 60 - HC - Wealth-tax

Penalty proceedings under section 18(1)(c) of the Wealth-tax Act 1957 - penalty proceedings initiated are distinct and separate from the regular proceedings - appeals pending on the file of this court are with respect to the questions of law arising out of the order of the Tribunal. The scope of the appeals is therefore limited to the determination of those questions of law arising out of the order of the Tribunal Therefore applications filed for stay of the penalty proceedings which do not arise or form part of the order of the Tribunal are not maintainable

Summary

Issues:
Stay of penalty proceedings under section 18(1)(c) of the Wealth-tax Act, 1957 for assessment years 1990-91, 1991-92, and 1992-93.

Analysis:
The applicant/assessee filed applications seeking a stay of penalty proceedings under section 18(1)(c) of the Wealth-tax Act, 1957 for the mentioned assessment years. The High Court admitted the appeals by the assessee under section 27A of the Act against the Tribunal's order for the same assessment years, noting substantial questions of law. The applicant argued that since the appeals were pending, the penalty proceedings should be stayed. Citing relevant judgments, the applicant sought a stay based on the pending appeals.

The court found the applicant's submissions untenable as penalty proceedings are distinct and separate from regular proceedings under the Act. It emphasized the separate procedure for penalties under the Act and clarified that the pending appeals were limited to determining questions of law arising from the Tribunal's order. The court deemed the applications for stay of penalty proceedings not maintainable as they did not arise from the Tribunal's order. The judgments cited by the applicant were considered irrelevant to the case's circumstances, leading to the dismissal of the applications.

The court clarified that the dismissal of the applications did not prevent the petitioner from pursuing other legal avenues concerning the penalty proceedings. Despite the dismissal, no costs were awarded in this case. Both judges, M.H.S. Ansari and Soumitra Pal, concurred with the decision, resulting in the dismissal of the applications seeking a stay of penalty proceedings under section 18(1)(c) of the Wealth-tax Act, 1957 for the specified assessment years.