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TMI Blog2012 (9) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... on is 1986-1987. For such assessment year, the assessee had not filed its return of wealth though the net wealth exceeded statutory limit. The department therefore, issued a notice dated 26.2.1998 under section 17 of the Wealth Tax Act, 1956("the Act for short). In response to such notice, the assessee filed return of wealth on 17.5.1988 and disclosed net wealth of Rs.4,08,194/-. Such return was assessed by the Deputy Commissioner of Wealth Tax under section 16(3)of the Act. He computed net wealth of assessee at Rs.28,38,855/-. Penalty proceedings under section 18(1)(c) of the Act were thereupon instituted. A show cause notice for this purpose was issued to the assessee in response to which reply dated 11.4.1991 was filed. In such reply the assessee contended that no material facts about wealth had been disclosed. The assessee had also disclosed value of various properties as per the books of accounts. If due to adoption of different method of valuation, there was a difference in the ultimate wealth assessed, such difference would not give rise to any penalty proceedings. 3.1 The Deputy Commissioner considered the assessee's reply but proceeded to impose penalty of Rs.30,522/- by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and having disclosed full particulars of the immovable properties exigible to wealth tax, it cannot be stated that the assessee concealed the particulars of the assets. He further submitted that the assessee had not furnished inaccurate particulars of such assets and the difference in valuation was solely on account of different methods adopted by the assessee and the Assessing Officer. He heavily relied on the findings of the appellate authority that there was bona fide difference of opinion regarding valuation of the immovable property. He submitted that if this be so, no penalty under explanation(4) of section 18(1)(c) of the Act could have been imposed. Counsel submitted that the Assessing Officer did not give any clear findings as to for which default of the assessee, the penalty was being imposed namely, for concealment of particulars or for furnishing inaccurate particulars of any asset. In that view of the matter, no penalty could have been imposed. In this respect counsel relied on the decision of this Court in case of Commissioner of Income-tax, Gujarat-III v. Manu Engineering Works reported in (1980) 122 ITR 307(Guj.) and in case of New Sorathia Engineering Co. v. Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7, such person shall be deemed to have furnished inaccurate particulars of such asset within the meaning of clause(c) of this sub-section. Explanation further provides that such deeming fiction shall arise unless the assessee proves that the value of the asset as returned by him is the correct value. Relevant portion of Section 18(1)(c) reads as under : "18(1) If the Wealth-tax Officer, Appellate Assistant Commissioner, Commissioner(Appeals), Commissioner or Appellate Tribunal in the course of any proceedings under this Act is satisfied that any person- (c) has concealed the particulars of any assets or furnished inaccurate particulars of any assets or debts. Explanation 4 : Where the value of any asset returned by any person is less than seventy per cent of the value of such asset as determined in an assessment under section 16 or 17, such person shall be deemed to have furnished inaccurate particulars of such asset within the meaning of clause(c) of this sub-section, unless he proves that the value of the asset as returned by him is the correct value." Section 7 of the Act pertains to value of assets and how the same is to be determined. Sub-section(1) of section 7 provides t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al having failed to take into consideration and deal with the decision of the jurisdictional High Court it would constitute an error in law which goes to the very basis of the controversy involved and hence, the impugned order of the Tribunal cannot be upheld." In case of Engineering Works (supra), Division Bench has held as under : "..... We find from the order of the IAC, in the penalty proceedings, that is, the final conclusion as expressed in para. 4 of the order: "I am of the opinion that it will have to be said that the assessee had concealed its income and/or that it had furnished inaccurate particulars of such income". Now, the language of "and/or" may be proper in issuing a notice as to penalty order or framing of charge in a criminal case or a quasi-criminal case, but it was incumbent upon the IAC to come to a positive finding as to whether there was concealment of income by the assessee or whether any inaccurate particulars of such income had been furnished by the assessee. No such clear-cut finding was reached by the IAC and, on that ground alone, the order of penalty passed by the IAC was liable to be struck down." 10.We therefore, are of the view that the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had furnished inaccurate particulars of such assets within the meaning of clause(c) of Section 18(1) of the Act. However, before such a deeming fiction could arise, the assessee had a right to prove that the value of the asset as returned by him was the correct value. We are also prepared to proceed on the basis that once it is established that the margin between the two values is more than 30%, the onus would be on the assessee to show that his valuation represented the correct value of the asset to avoid the penal liability by virtue of the fiction as provided in Explanation (4). However, when neither in show cause notice, nor during the proceedings before the Assessing Officer, there was even a remote hint that such deeming fiction would be made applicable in such as case, the onus could not be on the assessee to lead evidence to show that the value of the asset as returned by him was a correct value. 13.We may recall that Shri Mehta relied on the decision of Madras High Court in case of V.G. Paneerdas and Co. P. Ltd. (supra), which was however, a case wherein the assessee had filed a nil return even in response to notice under section 16 of the Act. Ultimately, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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