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TMI Blog2019 (9) TMI 1102X X X X Extracts X X X X X X X X Extracts X X X X ..... I have heard the Ld Representative both the parties and perused the material available on record. 2. In this case Ld Judicial Member has allowed all the above three appeals cancelling the penalty levied u/s 18(1)(c) of the Wealth Tax Act. The Ld Accountant Member, however, did not agree with the view of Ld Judicial member and directed that penalty should follow in the aforesaid appeals, resulting in to dismissal of all the appeals of the three assessees. On there being a difference of opinion between the Ld Members of Income Tax Appellate Tribunal, Amritsar Bench, Ld Accountant Member has referred the following questions to the Hon ble President for making a reference to the Third Member: (1) (a) Whether the issue of service of notice/s u/s. 17(1) of the Act is at all relevant, i.e., in the given facts circumstances of the case? (b) Whether, in the given facts and circumstances of the case, the material date for the purpose of levy of penalty in the instant case/s is the date of issue of notice u/s. 17(1) and not the date of its service, i.e., considering that the time for furnishing the return/s suo motu by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as no case qua merits, i.e., apart from claiming to have admitted the wealth escaping assessment voluntarily, has been made out at any stage by the assessee, i.e., without hearing the parties 3. Ld Judicial Member, however, did not agree with these proposed questions framed by Ld Accountant Member as above and has referred the following two questions for opening of Third Member: (i) Whether in the above referred cases, under the facts and circumstances wherein the assessees have filed their returns of wealth under the Wealth Tax Act voluntarily, may be belated, the penalties are leviable? (ii) Whether in the above referred cases, the assessees acted deliberately in defiance of law or are guilty of contumacious conduct or acted in conscious disregard of their obligations and therefore liable for the penalties 4. The Hon ble President, Income Tax Appellate Tribunal has nominated me as Third Member to decide the aforesaid questions. 5. Considering the facts of the cases and the proposed questions referred to me for decision in accordance with law, I am of the view that all the above questions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was filed by the asessee either by the due date even up to the last date, for which, a return of wealth for assessment year under appeal could have been filed, i.e., up to 31st March, 2016. The return of wealth was filed only on 25th April, 2016, i.e., after issue of notice u/s 17(1) of the Wealth Tax Act. Thus no voluntary returns have been filed by the assessees. The assessee has preferred not to file his return of net wealth for assessment year under appeal within the stipulated time available to him u/s 14 and 15 of the Wealth Tax Act, though he was having wealth above the taxable limit. The Assessing Officer therefore held that the assessee has concealed the particulars of asset and levied the penalty u/s 18(1)(c) of the Wealth Tax Act. The Ld Commissioner of Wealth Tax confirmed the levy of penalty and dismissed the appeal on the same reasoning. 7. Ld counsel for assessee reiterated the submissions made before the tribunal he has submitted that no notice u/s 17(1) of the Wealth Tax Act have been served upon the assessee. The assessee has filed return of wealth voluntary. The affidavit filed by the assessee was not rebutted. The return of we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(3) was completed and on perusal of the assessment record, it was found that assessee was having cash in hand as on 31st March, 2013, i.e., on valuation date relevant to assessment year under appeal, i.e., 2014-15 which is taxable asset as per Wealth Tax Act. The assesse is an individual and wealth tax provisions are applicable to him. The financial year relevant to assessment year under appeal completed on 31st March, 2014. Thus assessee was having sufficient time to file return of wealth because he was having the taxable wealth as on the valuation date, but, the assessee did not file return of wealth despite search was conducted during the financial year itself. The Assessing Officer finding no alternative issue notice for reassessment of escaped wealth u/s 17(1) of the Wealth Tax Act on 30th March, 2016 after recording the reasons. The assessee in response thereof filed return of wealth on 25th April, 2016 declaring net wealth amounting to ₹ 47,36,496/-. The Assessing Officer accepted the returned wealth, in which assessee declared cash in hand and dewellery which assessee was aware of the fact that on 4th September, 2013, i.e., date the search as well as on valuation dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. I rely upon judgments of Hon ble Supreme Court in the case of Brij Mohan v. CIT 120 ITR 1, CIT v. Omkar Saran Sons 195 ITR 1 and B. N. Sharma v. CIT 226 ITR 442. Since the assessee had to disclose their net wealth in the original return to be filed u/s 14 or 15 of the Wealth Tax Act, if they have failed to do so, but concealed the particulars of asset, the offence becomes complete. Thus the offence of concealment is complete and final when the assessee did not disclose the net wealth in their return or wealth tax to be filed up to 31st March, 2016. If the plea of the assessee that since there were no difference in the wealth of return and the assessed asset is accepted, an anomalous result will follow in certain glaring cases of concealment. Let me take the following illustration. The assessee conceals wealth in his original return. He gets aware with it and the original assessment is completed without detecting the concealment. Subsequently a notice is given for assessing escaped wealth. In these proceedings, assessee files a return of wealth including escaped or undisclosed wealth. In this situation the arguments on behalf of the assessee if accepted will res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is reason itself is leviable against all the assessees. I rely upon judgments of Hon ble Delhi High Court in the case of Zoom Communications 327 ITR 510 I rely upon the judgments of Hon ble Supreme Court in the case of Dharmendra Textile Processors 306 ITR 277 and Atul Mohan Bindal 317 ITR 1 in which it was held penalty is neither criminal nor quasi criminal, it is a civil liability. In the aforesaid cases, the claim of assessees had been that assessees denied service of notice u/s 17(1) of the Wealth Tax Act and that return of wealth was filed voluntarily. However, such a plea is not acceptable because of the reasons given above that assessees did not file return of wealth voluntarily within the period of limitation. The assessees were aware of having taxable wealth on the date of valuation, i.e., 31st March, 2013 despite that the assessees did not file return of wealth within the period of limitation. Though the return of wealth was not filed voluntarily, but, such plea would not absolve the assessee from the mischief of penal proceedings. The Hon ble Supreme Court in the case of Mak Data Pvt. Ltd. v. CIT 358 ITR 593 held as under: Voluntary disclosur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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