1996 (4) TMI 85 - HC - Wealth-tax

Summary

Issues:
Assessment years 1970-71 and 1971-72 under Wealth-tax Act, 1957; Filing of returns in response to notices; Penalty proceeding under section 18(3); Immunity under section 15(1) of Voluntary Disclosure Act; Appeal before Appellate Tribunal; Question of immunity under section 15(5); Reference to High Court under section 27(1); Apportionment of penalty under section 15(1)(b).

Detailed Analysis:

The case involved Tax Cases related to the assessment years 1970-71 and 1971-72 under the Wealth-tax Act, 1957. The primary issue was whether the returns filed by the assessee were in response to notices issued under section 17 of the Wealth-tax Act, impacting her claim for immunity under section 15(1) of the Voluntary Disclosure Act. The controversy arose as the assessee claimed she did not receive the notices and filed the returns voluntarily. The Appellate Tribunal found in favor of the assessee, concluding that the notices were not served on her, thus upholding her immunity claim.

Regarding penalty proceedings initiated under section 18(3) of the Wealth-tax Act, the Appellate Tribunal allowed the assessee's appeal, holding that she was protected by section 15(1) of the Voluntary Disclosure Act. The Tribunal reasoned that any delay in tax payment was unintentional, and the assessee had valid reasons for not paying before filing the declaration. The Tribunal's decision was based on the provisions of section 5(2) of the Act, extending the period for tax payment.

The Department sought a reference to the High Court, arguing that only the difference between the initial and later returns should be protected under the Voluntary Disclosure Act. The High Court rejected the Department's claim, emphasizing that the assessee was entitled to immunity under section 15(1) for all disclosed wealth. The Court highlighted that the assessment had not been finalized based on the initial returns, preventing any apportionment of penalty as per section 15(1)(b) proviso (ii).

In conclusion, the High Court ruled in favor of the assessee, affirming her immunity under section 15(1) of the Voluntary Disclosure Act. The Court appreciated the assistance of amicus curiae in the case. Judge Sachchidanand Jha concurred with the judgment.