COMMISSIONER OF WEALTH TAX Vs. BAL KRISHAN SHOOR

JUDGEMENT

(1.) AT the instance of the Revenue, the Income -tax Appellate Tribunal, Amritsar (for short "the Tribunal"), has referred the Court :

(2.) "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that penalty levied under s. 18(1)(a) in this case had been rightly deleted by the AAC - the WT Act, 1957 (for short "the Act"), were initiated and a show -cause notice was issued. The AO, vide order dt. 27th no reply to the show -cause notice was filed nor did anyone attend the proceedings before him on the date fixed for that purpose. The assessee preferred an appeal before the CWT. It was contended that the assessee had duly applied for vide receipt No. R -463636 explaining this position but the said reply has not been taken into account by the AO who had levied penalty on the assumption that no reply had been filed. The CWT accepted these contentions and held that the penalty imposed by the AO without taking into account the reply filed by the assessee and even the application for extension filed by him was tantamount to denial of a proper opportunity of being heard and thus, the order of penalty was not sustainable. These findings have been upheld by the Tribunal on further appeal by the Revenue.

(3.) WE have heard learned counsel for the Revenue. He has not been able to controvert the factual position that the application for extension had duly been filed and that the reply to the show -cause notice had also been filed. These have not been taken into account by the AO while levying the penalty. In view of this factual position, we are of the view that the CWT and the Tribunal were justified in holding that the penalty order passed by the AO was clearly not sustainable. Accordingly, we answer the question in the affirmative, i.e., in favour of the assessee and against the Revenue.