COMMISSIONER OF WEALTH TAX Vs. SHEO KUMAR DALMIA

JUDGEMENT

(1.) THESE are five references under Section 27(1) of the Wealth-tax Act at the instance of the Commissioner of Wealth-tax, Bihar. The five consolidated references are being disposed of by this judgment. The question referred for the opinion of this court is as follows :

(2.) THE references before us relate to imposition of penalty for non-filing of returns at the appropriate time. In this reference, we are concerned with the assessment years 1964-65 to 1968-69. THE assessee is a Hindu undivided family. THE returns of wealth had to be filed by 30th June of each assessment year. THEy were, in fact, filed for the said five assessment years on October 6, 1969. THE returns not having been filed when they were due, the Wealth-tax Officer (hereinafter referred to as "WTO") initiated proceedings under Section 18(1)(a) of the Wealth-tax Act, 1957 (hereinafter called "the Act"), and imposed penalty for each assessment year on the basis of the tax payable by the assessee in the respective years. THE orders imposing penalty are annexure A series to the statement of the case. THE assessee preferred appeals to the Appellate Assistant Commissioner against the order of the Wealth-tax Officer imposing penalty. On the date of hearing, however, the assessee withdrew the appeals. THE order of August 12, 1971, reads as follows:

(3.) IT is not necessary to multiply decisions, as the point admits of no difficulty. Reference may be made to a Full Bench decision of the Madhya Pradesh High Court in CIT v. Banwarilal [1983] 140 ITR 3. The point raised in that case was similar to the one before us. Although that was a case of exercise of power under Section 263 of the Income-tax Act, yet the ratio of that case will determine the case under Section 25(2) of the Wealth-tax Act as well. In that case, the facts were that the Income-tax Officer passed an assessment order. The assessee challenged the assessment in appeal challenging the addition in trading account and disallowance of deductions claimed as expenditure. The Appellate Assistant Commissioner upheld the disallowance, but set aside the addition of Rs. 5,000 in the trading account. After the appellate order made by the Appellate Assistant Commissioner, the Commissioner issued notice to the assessee under Section 263(1) of the Income-tax Act, 1961, which is in pari materia to Section 25(2) of the Wealth-tax Act. The Commissioner directed the Income-tax Officer to make a fresh assessment according to law. The assessee preferred an appeal to the Tribunal against the order of the Commissioner but without any success. In the reference before the High Court, it was contended that the order of the Income-tax Officer having merged in the appellate order of the Appellate Assistant Commissioner, the Commissioner had no jurisdiction to invoke the powers under Section 263(1) of the Income-tax Act. The Full Bench laid down that the Commissioner's revisional jurisdiction under Section 263 was available over matters not considered and decided by the Appellate Assistant Commissioner. In regard to other matters, he had no jurisdiction. From this decision, it will be seen that even when there is an appellate order, but it does not cover the entire matter falling for consideration before the Income-tax Officer, the matters which did not fall for consideration before the appellate authority could very well fall within the revisional jurisdiction of the Commissioner. The doctrine of merger was not attracted although there was an appellate order. The instant case before us must be placed on a much higher footing. In the case before us, the appellate, authority was not invited to give its verdict oh any of the matters decided by the Wealth-tax Officer. There can, therefore, be no question of merger. The view taken by the Madhya Pradesh High Court, which I am inclined to accept with respect, is based upon the decision of the Supreme Court in State of Madras v. Madurai Mills Co. Ltd., AIR 1967 SC 681 ; [1967] 19 STC 144 and CIT v. Amritlal Bhogilal and Co. [1958] 34 ITR 130 (SC) and that of the Gujarat High Court in Karsandas Bhagwandas Patel v. G.V. Shah, ITO [1975] 98 ITR 255.