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Issues Involved:
1. Maintainability of the appeal. 2. Jurisdiction of the Tribunal to hear the appeal. 3. Bona fide belief of the assessee regarding the valuation of jewellery. 4. Justification of the penalty imposed under Section 18(1)(c) of the WT Act, 1957. Detailed Analysis: 1. Maintainability of the Appeal: The primary objection raised by the Departmental Representative was regarding the maintainability of the appeal. It was argued that the Taxation Laws (Amendment) Act, 1975, effective from 1st April 1976, removed the Tribunal's jurisdiction to hear appeals against the orders of the Inspecting Assistant Commissioner (IAC) under Section 18(3) of the WT Act, 1957. The representative relied on several Supreme Court rulings, including Smt. Ganga Bai vs. Vijay Kumar & others, which stated that the right of appeal must have clear statutory authority. It was contended that the appeal filed on 21st April 1978 was misconceived and that the Tribunal had no jurisdiction to hear it. 2. Jurisdiction of the Tribunal: In contrast, the assessee's counsel argued that the right of appeal is a substantive right that crystallizes when the lis (dispute) commences. The counsel cited the ruling in Hoosein Kasam Dada (India) Ltd. vs. The State of Madhya Pradesh & Others, emphasizing that a vested right of appeal cannot be taken away by a subsequent amendment unless it is expressly or impliedly retrospective. The lis in this case commenced on 28th February 1976, when the show cause notice was issued, thus crystallizing the right of appeal. The Tribunal concurred, noting that the right to appeal existed when the lis arose and could not be negated by a prospective amendment. 3. Bona Fide Belief of the Assessee: The assessee's counsel argued that the assessee, a lady, had shown the value of jewellery based on a valuer's report dated 29th July 1972, which was accepted for the assessment years 1972-73 and 1973-74. The counsel contended that the assessee had a bona fide belief that this valuation would be valid for subsequent years as well. The fresh valuation report dated 17th January 1975 was promptly furnished when requested, indicating the assessee's bona fides. The Tribunal agreed, noting that the belief, even if erroneous, was bona fide and that the assessee could not have risked a penalty for a tax saving of Rs. 703. 4. Justification of the Penalty: The Departmental Representative argued that the assessee, being in possession of jewellery, should have been aware of its rising value and that the belief in the validity of the old valuation was not bona fide. However, the Tribunal found that the assessee's belief was bona fide, particularly since the valuation had been accepted for the previous years. The Tribunal cited the Supreme Court ruling in Hindustan Steel Ltd. vs. State of Orissa, which stated that penalty should not be imposed for a technical or venial breach or where the breach flows from a bona fide belief. The Tribunal concluded that the penalty under Section 18(1)(c) was not justified and was wrongly imposed by the IAC. Conclusion: The Tribunal overruled the preliminary objection regarding the maintainability of the appeal, upheld the assessee's bona fide belief regarding the valuation of jewellery, and found the penalty under Section 18(1)(c) to be unjustified. Consequently, the penalty was cancelled, and the appeal was allowed.
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