1978 (4) TMI 125 - AT - Wealth-tax

Summary

Issues:
1. Interpretation of orders passed by Wealth-tax Officer under s. 18(1)(c) and s. 18(2A) of the Wealth-tax Act, 1957.
2. Whether penalties imposed by Wealth-tax Officer were justified and appealable.
3. Difference of opinion between members of the Tribunal on the nature of the orders passed by the Wealth-tax Officer.

Analysis:
The Commissioner of Wealth-tax sought a reference to the Tribunal regarding the nature of orders passed by the Wealth-tax Officer under s. 18(1)(c) and s. 18(2A) of the Wealth-tax Act, 1957, and the validity of penalties imposed. The original assessments were completed under s. 16(3) of the Act, but later discrepancies were found, leading to penalty proceedings under s. 18(1)(c) initiated by the Wealth-tax Officer. Assessees moved applications under s. 18(2A) to reduce penalties, which were partially granted by the Commissioner. The Wealth-tax Officer imposed penalties under s. 18(1)(c) citing concealment of assets by the assessees. The Appellate Assistant Commissioner dismissed appeals against these penalties, leading to a difference of opinion within the Tribunal.

The Tribunal deliberated on whether the penalties were justified under s. 18(1)(c) or merely to give effect to orders under s. 18(2A). The Judicial Member opined that the penalties were correctly imposed under s. 18(1)(c) based on the concealment of income, while the Accountant Member believed the Wealth-tax Officer was implementing orders under s. 18(2A). The President was consulted on this matter, and the Third Member concluded that the penalties were indeed under s. 18(1)(c) and appealable before the Appellate Assistant Commissioner.

Subsequently, the Tribunal re-heard the appeals, with the Accountant Member ruling that no penalty was justified on merit, leading to the appeals being allowed. The Tribunal cited Supreme Court precedents emphasizing that penalties under s. 18(1)(c) are based on the assessment proceedings and the concealment of income. The Tribunal held that the penalties imposed by the Wealth-tax Officer were indeed under s. 18(1)(c) and not merely to give effect to orders under s. 18(2A), dismissing the Reference Applications as no questions of law arose.

In conclusion, the Tribunal upheld the penalties imposed under s. 18(1)(c) and dismissed the applications, emphasizing that the penalties were justified based on the concealment of income and were not merely to give effect to orders under s. 18(2A).