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TMI Blog1983 (12) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Wealth-tax for levying a penalty under that section, was not free from doubt and in proceeding to give the benefit of that doubt to the assessee so as to cancel the penalty ? " The assessee had failed to file the returns of his wealth for the years 1958-59, 1959-60, 1960-61 and 1961-62. The due date for filing the return for these years was 30th day of June of each one of the years 1958, 1959, 1960 and 1961. A notice under s. 17 of the Act was served upon the assessee's kamdar an January 20, 1962, for filing the return of the first three years and on February 10, 1962, for the year 1961-62. The due date of filing the returns in response to the notices was February 20, 1962, for the years 1958-59, 1959-60, 1960-61 and March 10, 1962, for the year 1961-62. However, the assessee filed the returns for all the four years on October 26, 1962, with a delay of eight months in the first three years, i.e., 1958-59, 1959-60, 1960-61 and seven months for the year 1961-62. The assessments for the years 1958-59, 1959-60, 1960-61 and 1961-62 were completed on July 9, 1967, July 29,1967, January 31, 1968 and. February 24, 1968, respectively. The Wealth-tax Officer (for short " WT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the provisions of the Act took place prior to the amendment of s. 18 of the Act. The learned members were of the opinion that the question of the applicability of amended s. 18 of the Act was not free from doubt and, therefore, the benefit of doubt should be given to the assessee. In that view of the matter, the Tribunal allowed the four appeals of the assessee by its consolidated order dated January 20, 1972. The two appeals filed by the WTO against the deduction, in the quantum of the penalty, granted to the assessee by the AAC for the assessment years 1958-59 and 1959-60 were dismissed. The Commissioner of Wealth-tax, Rajasthan, filed applications before the Tribunal for referring two questions of law arising out of their order dated January 20, 1972, to the High Court under s. 27(1) of the Act. The learned members allowed the request and drew up a statement of the case referring the two questions as mentioned above to this court. The point involved in the first question is regarding the plea of the assessee that he had reasonable cause for not filing the wealth-tax return within the time allowed under s. 14(1) of the Act. The WTO did not accept the submissions made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e would apply retrospectively or prospectively. Mr. Singhvi, learned counsel for the assessee, submitted that the provisions contained in s. 18(4) created a vested right in the assessee. Its intention was to impose restriction on the powers of the WTO and as such the subsequent amendment could not have vested in the WTO jurisdiction which he did not have at the time of the infringement of the provisions of the Act regarding the filing of the return of his assets. According to Mr. Singhvi, the due date for filing the returns in all the cases in response to the notice under ss. 17 and 14(2) fall prior to the amended s. 18 coming into effect and, therefore, infringement was to be considered from that time. Hence, the date of the completion of the assessment would not be material. Mr. J. P. Joshi, learned counsel for the Revenue, on the other hand, urged that the penalty proceedings were initiated subsequent to the amendment of s. 18 and, therefore, there was no necessity of seeking previous approval of the IAC. Mr. Singhvi referred to the case of Continental Commercial Corporation v. ITO [1975] 100 ITR 170 (Mad), wherein the question regarding the jurisdiction of the assessing au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 274 continued and he could dispose of the penalty proceedings. It was also observed that the IAC would continue to have jurisdiction in matters pending before him despite the amendment Act of 1970, as there is no intention either by express words or by necessary implication that the IAC will not have jurisdiction even in pending matters. In other words, the matters which were already referred to him remained unaffected. The third case relied on by Mr. Singhvi is also on the same line. Their Lordships were pleased to observe that there is no provision in the Taxation Laws (Amendment) Act, 1970, to indicate that the amendment of s. 274 is retrospective. The section deals with vested rights and, therefore, the amendment is prospective in operation. Their Lordships were further pleased to observe that the jurisdiction of the IAC to deal with matter of penalty is to be looked at as on the date of the initiation of proceedings and not with reference to subsequent events and such jurisdiction cannot be divested by what has subsequently happened. If during the time when the matter of penalty had been referred to and was pending before the IAC, the law was changed and the minimum penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion of penalty and do not have the effect of making the default in question a continuing one. Nor do they make the amended provisions modifying the penalty applicable to earlier defaults in the absence of necessary provisions in the amending Acts. The principle to be inferred and penalty to be imposed would be as provided in the relevant provisions at the time of committing the default. If the default continues subsequent to the amendment Act, the amount would be multiplied in accordance with the provisions prior to the amendment. The reason is simple. A person cannot be subjected to greater penalty or punishment greater than what he could be liable for when the offence was committed. The subsequent amendment would not change the position unless it is specifically provided for. That safeguard is also available for penal provisions under the taxation legislation. In this regard, reference may again be made to the case of CWT v. Suresh Seth [1981] 129 ITR 328 (SC). Their Lordships were pleased to observe as under (p. 335) : " In the case of acts amounting to crimes, the punishment to be imposed cannot be enhanced at all under our Constitution by any subsequent legislation by rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding the procedure to be followed for imposing the penalty. In our view, s. 18(4) only provides the procedure to be adopted regarding the imposition of penalty and not the rate of penalty. Thus, the procedure to be followed subsequent to the amendment of that section would not put the petitioner in any disadvantageous position regarding the quantum of penalty to be imposed. Assuming for a moment that the post of IAC would have been abolished, then would it mean that all the cases in which imposition of penalty have been proper, would be dropped automatically. It would be profitable to refer to some cases which lay down the general proposition regarding the retrospectivity of a law relating to procedure. In the case of Anant Gopal Sheorey v. State of Bombay, AIR 1958 SC 915, the question regarding the retrospective effect of the change in law of procedure came up for consideration and their Lordships were pleased to lay down the following principles (p. 917) : " No person has a vested right in any course of procedure. He has only the right of prosecution or defence in the manner prescribed for the time being by or for the court in which the case is pending and if, by an Act of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to were based and cases pending before the IAC were not disturbed by applying the amended provisions retrospectively. The position, therefore, is that the amendment in the procedural law would ordinarily operate retrospectively in the absence of anything to the contrary. In respect of cases pending before the IAC at the time of amendment of s. 18(4) of the Act, he had authority to grant or refuse permission. But to cases which were not so referred to him by that time under s. 18(4) of the Act, the provisions of amended s. 18(1)(a) would be applicable. In view of the above discussion, the Tribunal was not right in giving the benefit of doubt to the assessee, on the ground that the question whether after the amendment of s. 18(i)(a) of the Act by Act No. 46 of 1964, the WTO should obtain the previous approval of the IAC of Wealth-tax for levying penalty under that section was not free from doubt. The procedure provided in the amended provisions of s. 18(1)(a) of the Act had retrospective effect and was applicable to the proceedings for imposition of penalty which were initiated after the amending Act came into force. Question No. 2 is answered accordingly. Regarding question No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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