MANJULADEVI TODY Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) BY this reference under Section 27(1) of the W.T. Act, 1957 (hereinafter referred to as "the Act"), the Income-tax Appellate Tribunal, Indore Bench, has referred the following question of law to this court for its opinion:

(2.) THE material facts giving rise to this reference briefly are as follows :

(3.) THUS, from April 1, 1976, the IAC has no jurisdiction to impose penalty. While considering similar provisions in the I.T. Act, 1961, a Division Bench of this court in CIT v. Tiwari [1980] 124 ITR 680 held that what was important to see was whether the reference was validly made to the IAC and that if the reference was valid in accordance with the provisions, as they stood at the time of making the reference, it would not be invalidated by subsequent amendment in that provision. The jurisdiction of the IAC for the purpose of imposing penalty is derived on a reference made to him by the WTO and if the reference was not validly made, then it follows that the IAC would have no jurisdiction to impose penalty. In the instant case, as stated in the supplementary statement of the case, the reference was made by the WTO on March 11, 1977, when the provisions of Section 18(3) of the Act requiring the WTO to refer the case to the IAC were substituted by the aforesaid provisions of Section 18(3) of the Act. In our opinion, therefore, on the facts and in the cirumstances of the case, the IAC of Wealth-tax had no jurisdiction to impose penalty under Section 18(1)(c) of the Act, after the amendment of Section 18(3) with effect from April 1, 1976, by the Taxation Laws (Amendment) Act, 1975. Our answer to the question referred to this court, therefore, is against the Department.