9911796707
TMI Blog1980 (7) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... mt. Dayawanti, W/o Shri Jethanand Manek Chand. 2. Smt. Nirmala Devi, W/o Shri Lekhraj Manek Chand. 3. Smt. Premila Devi, W/o Shri Mohan Lal Manek Chand. For the assessment year 1969-70, relevant to the valuation date as at March 31, 1969, the assessee filed her return of net wealth on July 30, 1969, declaring her total wealth at Rs. 1,07,665. Vide his order dated .January 20, 1972, the WTO completed the assessment on a total wealth of Rs. 1,37,910 for the year under consideration. A sum of Rs. 25,682 was added to the declared wealth of the assessee in consequence of the settlement arrived at between the firm and the department. The application for settlement had been made on March 24, 1971. The WTO also initiated penalty proceedings u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench (hereinafter referred to as the Tribunal), which dismissed the same with the following observations : " From a plain reading of the above provision it is obvious that the Wealth-tax Officer is required to refer the case to the Inspecting Asstt. Commissioner of Wealth-tax u/s. 18(3) of the Wealth-tax Act if at the time of assessment he finds that the amount in respect of which penalty is imposable u/s. 18(1)(c) exceeds a sum of Rs. 25,000. Now in the present case, the assessments were completed by the, Wealth-tax Officer on 20-1-1972 and at this time the amount of concealed wealth added to the net wealth of the assessee for each of the assessment years in question was a sum of Rs. 25,682. Since, at the time of assessment the minimum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since the WTO had himself rectified his error by holding that the wealth concealed came to Rs. 6,072 only and this fact was brought to the pointed notice of the IAC, he should not have decided the case himself and should have declined the reference by observing that the WTO was himself competent to give a decision in the penalty proceedings. On the other hand, Mr. Awasthy, learned counsel for the revenue, submitted that once the IAC is found to have correctly assumed the jurisdiction on the date when the reference was made to him, the same could not be ousted by subsequent events. The learned counsel further submitted that on the date when the reference was made, the WTO was prima facie of the view that the value of the wealth concealed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is prospective. Consequently, the IAC had the jurisdiction to impose the penalty." According to Mr. Awasthy, the principle laid down in this authority could also be invoked in the present case, because there was in principle no difference in the ouster of jurisdiction under the amended statute or under some action taken in accordance with s. 35 of the Act. Mr. Awasthy further contended that the period of limitation for making a rectification being four years, a reference made by the WTO on the basis of which the IAC assumed jurisdiction, could not be allowed to remain in a state of uncertainty for such, a long period. After carefully considering the arguments raised at the Bar, we are of the view that the, decision depends upon two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the case. All that the section provides is that he shall have the powers of imposing penalty. This implies that if at the time when the case comes up for final hearing, the IAC is satisfied that the conditions precedent for the exercise of his jurisdiction are lacking, it is open to him to decline the reference. The view taken by us finds ample support from Queen v. Commissioners for the Special Purposes of the Income-tax [1888] 21 QBD 313, 319 (CA). Speaking for the court, Lord Esher M.R. observed as under: " When an inferior court or tribunal or body, which has to exercise the power of deciding facts, is first established by Act of Parliament, the legislature has to consider what powers it will give that tribunal or body. It may in ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, the determination made by the WTO was modified by him under a statutory provision. Since the jurisdiction of the IAC depends upon this determination, the same would necessarily be ousted if the statutory requirement regarding the amount of penalty imposable becomes unsatisfied. The view which we have taken is also in accord with general principles of law followed by the courts. It is desirable that controversy between the parties should be settled by the lowest officer in the hierarchy of domestic tribunals. If a matter which lies within the jurisdiction of the lowest tribunal is decided by the appellate authority, the citizen loses a valuable right of appeal to the lower Appellate Tribunal. These considerations apart, to err is human ..... X X X X Extracts X X X X X X X X Extracts X X X X
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