COMMISSIONER OF WEALTH TAX Vs. PADAMPAT SINGHANIA

JUDGEMENT

(1.) THIS is a reference under the Wealth-tax Act by the Income-tax Appellate Tribunal, Allahabad Circle, Allahabad, at the instance of the Commissioner of Wealth-tax, Lucknow. Along with the statement of the case the Tribunal has referred this question :

(2.) THE assessment years are 1957-58, 1959-60, 1960-61, 1961-62 and 1962-63, THE assessee is an individual. During the war he earned certain income which was concealed from the income-tax authorities. A notice under Section 34(1A) of the Income-tax Act, 1922, was issued to him. THEreafter, there was a settlement under Section 34(1B) of the Income-tax Act. THE settlement was signed by the assessee and his two brothers on January 17, 1957. It appears from the first clause of the settlement that the assessee and the department settled the figure of the concealed income between 1940-41 and 1946-47 at Rs. 1,33,57,833. After making certain allowable deductions, it was agreed by Clause (5) that the income-tax payable by the assessee would be Rs. 31,92,353. Clause (6) provides that the said sum shall be paid by the assessee in five instalments. THE first four instalments are of six lakhs of rupees and the last instalment is of Rs. 7,92,353. It was agreed that the first instalment would be payable on February 28, 1957 ; the second instalment on February 28, 1958; the third instalment on February 28, 1959 ; the fourth instalment on February 28, I960, and the last instalment on December 31, 1960. It is not necessary to refer to the other clauses of the settlement. THE Central Board of Revenue passed an order in accordance with the settlement on May 1, 1957. In the preamble of the order it is stated :

(3.) DR. R. R. Misra, on behalf of the department, has urged two points for our consideration. Firstly, he has submitted that as the order of the Central Board of Revenue under Section 34(1B) of the Income-tax Act was passed on May 1, 1957, the amount of tax which the assessee asserts to be due by him on the valuation date for the assessment year 1957-58 was not at all due on the valuation date. According to him the liability was not in existence on the valuation date. It came into being only when the Central Board of Revenue passed the order under Section 34 (1B) on May 1, 1957. The other argument relates to the remaining assessment years. The argument is that as the total amount of tax had not been paid by the assessee for a period of more than twelve months on the valuation date, no deduction could be made. On both the questions the Tribunal held against the department. On the first question the Tribunal says :