COMMISSIONER OF WEALTH TAX Vs. MAHATAB CHAND

JUDGEMENT

(1.) FOR the five asst. yrs. 1965 -66 to 1969 -70, the assessee filed his return under the WT Act on 28th Feb., 1970. The same day the WTO passed an assessment order accepting the wealth returned for each of the five years. Subsequently, he issued a notice proposing to impose penalty on the assessee. In response, the assessee appeared and made several submissions as to why the returns were filed with delay. The various submissions were repelled and varying amounts of penalty were imposed by an order dt. 2nd Jan., 1971. The assessee went up in appeal, but failed. He then went up to the Tribunal. The Tribunal, relying on the decision of the Calcutta High Court in the case of CIT vs. Vegetable Products Ltd. (1971) 80 ITR 14 and also of the Delhi High Court in the case of CIT vs. Hindustan Industrial Corporation (1972) 86 ITR 657 held that the phrase "tax, if any, payable by him" occurring in S. 18(1)(i) of the WT Act means the tax outstanding on the date the penalty order was passed. Holding that in fact there was no tax outstanding at that time it cancelled the imposition of penalty. At the instance of the Department, the Tribunal has referred the following questions of law for our opinion :

(2.) THERE is no doubt that the provisions of S. 18(1)(i) of the WT Act are identical in language with s. 271(1)(i) of the IT Act. The provisions of the IT Act came up for consideration before the Supreme Court in the case of Vegetable Products Ltd. (1973) 88 ITR 192, which was an appeal from the decision of the Calcutta High Court mentioned above. After discussing the pros and cons of the contentions, the Supreme Court ultimately held that the phrase " the amount of the tax, if any, payable by him" occurring in that section refers to the tax payable for which a demand notice is issued under S. 156. It further held that the words "the tax" occurring in the latter part of the provision also refer to the amount of tax referred to in the earlier part, namely, the amount of tax mentioned in the demand notice issued under S. 156. In view of this decision we are unable to agree with the view taken by the Tribunal that the amount in question has to be determined with reference to the tax still outstanding on the date on which the WTO passes the penalty order. The crucial amount is that which is mentioned in the demand notice. The Tribunal has not, however, given the facts as to what was the amount of tax assessed on the quantum side and as to when it was paid and what was the amount mentioned in the demand notice issued by the WTO. These facts will, however, be found by the Tribunal after the matter goes back to it as a result of our answer. We, therefore, answer the questions referred to us by holding that the penalty under S. 18(1)(a) is to be imposed with reference to the tax mentioned in the demand notice. We return question No. 2 unanswered, because the answer to it will depend upon the facts that have not yet been found and which will be found by the Tribunal hereafter.