COMMISSIONER OF WEALTH TAX Vs. P KRISHNASWAMY MUDALIAR

JUDGEMENT

(1.) BY these petitions under Section 27(3) of the Wealth-tax Act, 1957, the Commissioner of Wealth-tax, Tamil Nadu-II, Madras, requests the court to direct the Income-tax Appellate Tribunal, Madras Bench, to refer the following questions of law for the opinion of this court:

(2.) THE facts that give rise to these question are as follows : THE respondent herein is a partner of the firm, M/s. P. Krishnaswamy and Company, Madras. In respect of the assessment years 1964-65 and 1965-66 of the firm, dealing with income-tax, certain peak credits of the hundi loans as a result of settlement arrived at between the firm and the department, were agreed to be spread over for the assessment years 1966-67 to 1969-70 as the income from the firm and the same to be capitalised. This was effected pursuant to a settlement entered into between the firm and the department, and one of the terms of the settlement was that minimum penalty should be levied for all the years and that the wealth-tax assessment of the partners should be modified. It is the common case that no penalty under the Income-tax Act was levied. Subsequently, action was taken under Section 18(1)(c) read with Section 18(3) of the Wealth-tax Act, 1957, for levy of penalty for all these years, viz., 1966-67 to 1969-70. THE Inspecting Assistant Commissioner passed orders levying penalty in a hurried manner in view of the fact that the time limit for passing the order was about to expire. THE Tribunal has extracted the relevant part of the order of the Inspecting Assistant Commissioner in its order. THE same is as follows ;