COMMISSIONER OF WEALTH TAX Vs. JAI GOPAL GOEL

JUDGEMENT

(1.) BY this petition under S. 27(3) of the WT Act, 1957 (for short the Act), the Revenue seeks a direction to the Tribunal, Delhi Benches, to state the case and refer the following questions, stated to be one of law, for the opinion of this Court :

(2.) BACKGROUND facts giving rise to the present petition are that for the asst. yr. 1974-75, the assessee filed his wealth-tax return declaring a net wealth of Rs. 1,88,775, which represented only the movable property. The return was accepted under S. 16(1) of the Act. However, the assessee moved a petition before the WTO under S. 35 of the Act for rectification of the assessment order, stating that while computing his wealth, some assets have been included twice over and the liabilities had not been correctly deducted. The application was rejected by the WTO. Against the said order, the assessee filed a revision petition before the CWT(A) under S. 25(1) of the Act wherein it was stated that the return was prepared by the accountant and it was signed by the assessee under the bona fide impression that it was correct. The application was accepted by the CWT and the assessment framed was set aside with a direction to the WTO to pass a fresh order. In the fresh proceedings before the WTO, the AO found that the assessee had declared that he had some immovable property in the form of a plot and structure at Ghaziabad. He required the assessee to submit complete details about the said property along with the basis of its valuation. Pursuant thereto, the assessee filed a revised return along with the valuation report by an approved valuer showing the value of the property at Rs. 5,10,100, determined by adopting rent capitalisation method. A fresh assessment order was passed on the basis of the said return. However, while doing so, proceedings under S. 18(1)(c) of the Act were initiated against the assessee for concealing his wealth. After granting an opportunity to the assessee, a penalty of Rs. 5,10,100, being 100 per cent of the concealed wealth, was imposed by the WTO. Assessee's appeal to the CWT(A) was partly successful inasmuch as the CWT(A) reduced the quantum of penalty by Rs. 1 lac. The assessee took the matter in further appeal to the Tribunal. While deleting the penalty, the Tribunal took note of the fact that in the original return, the value of the land and building had been shown though under the head "movable property"; after the assessment the assessee moved a miscellaneous application seeking rectification and in this application the existence of land and building was also disclosed; upto the stage of rectification application the WTO had not made any inquiries in the matter and the facts regarding immovable property were disclosed by the assessee himself. Considering the behaviour of the assessee in approaching the authorities and the CWT even when his return had been accepted, the Tribunal found that there was no intention on the part of the assessee to conceal wealth or to avoid the payment of wealth-tax. Regarding the fair market value of the asset, the Tribunal felt that the investments made by the assessee and the figures shown in his balance sheet, the disclosure of the value of the asset on actual cost basis could not be said to be an act of fraud in the light of his aforenoted conduct, when he himself got the assessment reopened. The Tribunal has observed that if the assessee had intended to defraud the Revenue he would not have taken any action after his returned wealth had been accepted and, further, he would not have pursued his rectification application even by filing revision petition before the CWT. The Tribunal finally held that there was no gross or wilful neglect on the part of the assessee and the onus which lay on him under Explanation to S. 18(1)(c) stood discharged. Revenue's application under S. 27(1) of the Act having been dismissed, the present petition has been filed.

(3.) IT is vehemently submitted by Mr. Sanjiv Khanna that the disclosure of the immovable property by the assessee was not a voluntary act on his part and it was only after searching inquiries had been made by the WTO that the assessee had no option but to declare his wealth correctly and, therefore, the finding of the Tribunal that there was no gross or wilful neglect on the part of the assessee in disclosing the asset in question is, per se, perverse, giving rise to a question of law. Mr. C.S. Aggarwal, learned counsel for the assessee, on the other hand, while supporting the order passed by the Tribunal has submitted that the findings recorded by the Tribunal while coming to the aforenoted conclusion are based on cogent material on record and cannot be said to be perverse. It is asserted that the aforenoted finding are pure findings of fact giving rise to no question of law.