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TMI Blog1978 (12) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... leviable and called upon the WTO to pass orders accordingly. Admittedly, this order of the Commissioner was not communicated to the assessee. Pursuant to the order of the Commissioner, the WTO himself passed an order in accordance with the order of the Commissioner levying penalty on the assessee. Against the order of the WTO, the assessee preferred appeals to the AAC, Range-II, Coimbatore. That officer disposed of the appeals on a preliminary ground to the effect that since the Commissioner had passed orders under ss. 18(2A) and 18(2B) of the Act, that order shall not be called in question before any court of law or any authority and, therefore, no appeal could lie against the penalty orders passed " in pursuance of the Commissioner's orders under s. 18(2A) of the Act ". The assessee took the matter further in appeal to the Income-tax Appellate Tribunal, Madras Bench. The Tribunal by its order dated 30th December, 1972, allowed the appeals preferred by the assessee on the ground that the order of the Commissioner dated July 19, 197l, was not a valid one, since it was not communicated to the assessee, that the order levying penalty was only that of the WTO, that against the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty without referring them to the Appellate Assistant Commissioner for fresh disposal on merits ? " The answers to the questions referred to this court depend upon the statutory provisions contained in the Act. The relevant statutory provisions, as they stood, with reference to the assessment years in question, are contained in ss. 18(1)(a), 18(2A) and 18(2B) of the Act. Section 18(1)(a), enables the WTO, AAC, Commissioner or Appellate Tribunal in the course of any proceedings under the Act to levy penalty, if an assessee has, without reasonable cause, failed to furnish the return which he is required to furnish under sub-s. (1) of s. 14. Section 18(2A) provides : " Notwithstanding anything contained in clause (i) or clause (iii) of sub-section (1), the Commissioner may, in his discretion--(i) reduce or waive the amount of minimum penalty imposable on a person under clause (i) of sub-section (1) for failure, without reasonable cause, to furnish the return of net wealth which such person was required to furnish under sub-section (1) of section 14..." Section 18(2B) of the Act states : " An order under sub-section (2A) shall be final and shall not be called in question be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs passed by the WTO were " in pursuance of the Commissioner's orders under section 18(2A) of the Act ". Thus, it will be seen that even the AAC proceeded on the basis that there was an order of the Commissioner under s. 18(2A) of the Act and the WTO passed orders " in pursuance " of that order of the Commissioner. In such a context, the appeals preferred to the AAC being not against the orders passed by the Commissioner himself, but only against the orders passed by the WTO " in pursuance " of the order of the Commissioner, the AAC was wrong in holding that no appeals lay to him. However, when the matter was taken up to the Tribunal, the Tribunal took the view that both in fact and in law, there was no order of the Commissioner under s. 18(2A) of the Act and there was only the order of the WTO under s. 11 (1)(a) of the Act. For the purpose of coming to the conclusion that there was no order of the Commissioner under s. 18(2A) of the Act, the Tribunal proceeded on the basis that the order of the Commissioner, to which we have already drawn attention, was not really an order, but was merely a confidential letter addressed by the Commissioner to the WTO. However, we are of the opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der imposing penalties in the amount fixed by the Commissioner himself on the assessee. In fact, the order passed by the WTO contains the following headings : " Penalty, prosecution and composition--Sri M. K. S. Vanavarayar, Samathur Palace, Samathur Post, Pollachi Taluk--18(1)(a) Penalty--Levy of." Thus, it is clear that even though the quantum of the penalty was in terms of the decision of the Commissioner, the WTO sought to exercise powers only under s. 18(1)(a) of the Act by way of levying the penalty. Mr. J. Jayaraman, the learned counsel for the revenue, put forward two contentions before us. One was that the order of the Commissioner dated July 19, 1971, was communicated by the WTO by his orders dated September 28, 1971, and therefore the Tribunal was wrong in holding that the order of the Commissioner was not communicated to the assessee. Secondly, the learned counsel contended that even when the Commissioner passes an order under s. 18(2A) of the Act, it must be only with reference to s. 18(1)(a) of the Act and under s. 18(1)(a) it is only the WTO who could impose a penalty. We have no hesitation whatever in rejecting both these contentions. As far as the first co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of the Supreme Court. Consequently, we come to the conclusion that the order of the WTO dated September 28, 1971, had independent existence of its own and, therefore, an appeal against that order was competent and the Tribunal was justified in holding that the order of the Commissioner dated July 19 ,1971, had no legal existence and that the only order which was operative was the order of the WTO dated September 28, 1971, against which an appeal lay. Mr. J. Jayaraman then contended that if the Tribunal came to the conclusion that an appeal was available to the assessee and it had jurisdiction to deal with the appeal, the Tribunal should have immediately set aside the order of the WTO on the ground that it was beyond his jurisdiction and ought not to have gone into the merits of the order levying penalty. The basis for this argument was that without there being the order of the Commissioner under s. 18(2A) of the Act, the WTO will not have jurisdiction to levy a penalty less than the minimum penalty and in this case he having levied a penalty less than the minimum penalty, that order should have been set aside by the Tribunal as being without jurisdiction. Here again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration remained outstanding. The outstanding amounts were made as a charge on the agricultural lands wit all the rights of the unpaid vendor's lien. The appellant was under the bona fide belief that the balance of sale consideration did not constitute wealth so as to be liable to tax under the Wealth-tax Act. After taking competent legal advice, he came to know that all the outstanding amounts on the sale of lands constitute wealth and they are liable to wealth-tax. Thereafter, he voluntarily filed wealth-tax returns on December 14, 1970, for assessment years 1962- 63 to 1967-68." This finding of the Tribunal is sufficient to answer the point raised by learned counsel for the revenue before us. In fact, the third question in T. C. No. 394 of 1974, having regard to the form in which it has been referred to the court, will not admit of any further contention on the part of the learned counsel for the revenue as to the correctness or otherwise of the conclusions of the Tribunal in this behalf. Under these circumstances, we answer all the questions raised in these references except question No. 2 in T. C. Nos. 1427 to 1432 of 1977 in the affirmative and in favour of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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