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TMI Blog2005 (2) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... e cannot claim immunity from levy of penalty by relying on circular dated February 14, 1986. - reference made by the Tribunal is answered in the affirmative, i.e., in favour of the Revenue - - - - - Dated:- 8-2-2005 - Judge(s) : G. S. SINGHVI., VINEY MITTAL. JUDGMENT The judgment of the court was delivered by G.S. Singhvi J- The Income-tax Appellate Tribunal, Delhi Bench 'B', New Delhi (for short "the Tribunal") has, in compliance with the order dated November 10, 1997, passed by this court, referred the following question of law for its opinion: "Whether on the facts and in the circumstances of the case, penalty for failure to furnish the wealth-tax return within time for the assessment year 1979-80 was imposable on the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ") initiated proceedings under section 25(2). He issued notice dated December 22, 1987, to the assessee which was duly received by him. On January 5, 1988, Shri Kanwal Nain Sharma appeared on behalf of the assessee and sought adjournment on the ground that the assessee had gone to Kanpur. On the next date of hearing, i.e., January 19,1988, no one appeared on behalf of the assessee. Therefore, the Commissioner proceeded ex parte and vide his order dated February 26, 1988, he enhanced the value of the assessee's wealth by Rs. 8,24,806. The Tribunal allowed the appeal filed by the assessee and held that the report dated March 14, 1985, could not be taken into consideration for the purpose of assessing wealth because till the filing of return, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... careful thought to the rival submissions of the parties. On similar facts, the Income-tax Appellate Tribunal had already held the return for the assessment year 1979-80 filed on March 7, 1986, to be out of time and invalid in the light of the provisions of section 17A(1)(b) of the Wealth-tax Act. The decision is equally applicable to the return filed for the assessment year 1978-79. If returns were invalid and could not be acted upon, the assessments made are also invalid and under such assessment the question of initiating or levying penalties under section 18 would not arise. Therefore, all the three penalties under appeal are held to be without jurisdiction and are cancelled. We also find force in the alternative submission of Shri Shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal. By an order passed today in W.T.R. Nos. 7 and 8 of 1990 CWT v. Anil Tayal (HUF) (No. 1) [2006] 285 ITR 243 (P H), we have accepted the reference made at the instance of the Revenue and held that the Tribunal committed a serious error by canceling the order of the Commissioner passed under section 25(2) of the Act. In view of that order, the conclusion recorded by the Tribunal on the issue of penalty imposed under section 18(1)(a) of the Act is liable to be set aside. We are further of the view that the Tribunal committed a serious illegality by upsetting the order of the Appellate Assistant Commissioner in so far as it related to penalty imposed under section 18(1)(a) of the Act ignoring the fact that the assessee had not file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such income; (b) has, on or before the 31st March, 1986, paid the tax on the income disclosed; and (c) has co-operated in any enquiry relating to the assessment of his income. 2. This order shall come into force on the 17th day of February, 1986." A reading of the above reproduced circular makes it clear that immunity against the levy of penalty is available only if the assessee had voluntarily and in good faith made disclosure of net wealth between November 15, 1985 and March 31, 1986. In the present case, notices had been issued under sections 17(1) and 16(4) of the Act much before the filing of return. Therefore, the assessee cannot claim immunity from levy of penalty by relying on circular dated February 14, 1986. In the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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