COMMISSIONER OF WEALTH TAX Vs. SOMA WANTI SETHI

JUDGEMENT

(1.) ALL these references involve a common question which has been referred by the Income -tax Appellate Tribunal, Delhi Bench 'E' (in short the 'Tribunal'), under S. 27(1) of the WT Act, 1957 (in short the 'Act'), for opinion of this Court : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that no addition could be made to the net wealth of the assessee on account of disclosure of income -tax made by the firm in which she was a partner even though the provisions of Voluntary Disclosure Act, 1976 with particular reference to S. 13(2) r/w s. 8(i) of the said Act were not complied with and as such, disclosure could not be accepted -

(2.) THE relevant assessment years are 1965 -66 to 1969 -70. The valuation date in each case was 31st March, of the relevant year. Assessee is an individual. She was a partner in a partnership firm styled M/s Gulab Singh Sethi & Sons. Said firm made a declaration under the provisions of the Voluntary Disclosure of Income and Wealth Act, 1976 (in short the 'Voluntary Disclosure Act') disclosing an income of Rs. 31 lakhs stated to have been earned during the accounting years relevant to the asst. yrs. 1961 -62 to 1974 -75. Block assessment in respect of the said voluntary disclosure was made by the ITO and tax was charged accordingly from the firm. On the basis of disclosure made by the firm. Inspecting Assistant Commissioner (in short the 'IAC') made addition of Rs. 3,44,000 while computing assessee's net wealth for each of the years. It was, however, observed that this wealth will later be excluded if the assessee fulfils the condition laid down in the Voluntary Disclosure Scheme, 1975. It is to be noted that there was no question of assessee fulfilling any condition, because it had not made any declaration. The conclusion was challenged in appeals before the Commissioner of Income -tax (Appeals) [in short the CIT(A)]. The said authority was of the view that action of IAC was not correct and directed exclusion of the amount in question in each year. Matter was carried in appeal before the Tribunal by the Revenue. Tribunal, with reference to S. 13 of the Voluntary Disclosure Act held that the Explanation appended thereto clearly applies and, therefore, CIT(A)'s conclusions were in order. On being moved for reference, the question as set out above has been referred for opinion of this Court.

(3.) LEARNED counsel for the Revenue submitted that the true effect of S. 13(2) r/w S. 8(1) of the Voluntary Disclosure Act was not kept in view and the effect of non -compliance with the requirements and its consequential bearing on the declarations made were lost sight of. There was no appearance on behalf of the assessee in spite of service.