BANWARILAL CHOWKHANI Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THIS reference under S. 27(1) of the WT Act, 1957 (hereinafter referred to as "the Act"), at the instance of the assessee, had been referred to this Court for decision on the following question :

(2.) THIS reference relates to asst. yrs. 1960 -61 to 1964 -65. The following chart shows the details relating to the various assessment years : In all the five assessment years, the WTO initiated penalty proceedings under S. 18(1)(a) of the Act. The assessee appeared before the WTO and some explanation was given before him but the WTO has not pointed out what explanation was given. The WTO has pointed out that no written explanation was filed by the assessee. The WTO held in all the five assessment years that the assessee could not give any satisfactory explanation. He, therefore, imposed penalty under S. 18 (1)(a) of the Act in all the five assessment years in question.

(3.) THE Department, being aggrieved by the order of the AAC, preferred appeals before the Tribunal on the ground that the AAC was not correct in holding that the prior approval of the IAC was necessary for the imposition of penalty under S. 18(1)(a) of the said Act in respect of the assessment years in question though the assessment was made after the date on which the W.T. (Amend.) Act, 1964, came into force and though the returns were filed after the date on which the W.T. (Amend.) Act, 1964, came into force relating to the asst. yrs. 1963 -64 and 1964 -65. The Tribunal, on a consideration of the arguments placed by both the parties, had come to the conclusion that the obtaining of the previous approval of the IAC was a procedural matter and when it was omitted by the W.T. (Amend.) Act, 1964, from 1st April, 1965, the amendment will be applicable to all the proceedings which were pending. The Tribunal found that the WTO imposed the penalty on 15th Dec.,1971, and so the Tribunal held that it was not necessary for the WTO to take the previous approval of the IAC as no provision was there at the time he was levying the penalty and the Tribunal also held that obtaining the prior approval of the IAC was only a procedural matter and when the provision was omitted no approval was necessary. In view of the aforesaid finding, the Tribunal has held that the AAC was not correct in cancelling the orders of the WTO on the ground that he had failed to take the prior approval of the IAC before imposition of penalty under S. 18(1)(a) of the Act. It further held that as the AAC had not given any finding on the other pleas which were taken by the assessee before the AAC the Tribunal set aside the order of the AAC and directed him to decide the other grounds taken by the assessee according to law after giving opportunity to both the parties of being heard.