Commissioner of Wealth Tax vs Smt. Sujatha Venkateswaran

V. S. Sirpurkar, J.—The question referred to us is as follows :

Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in directing the Assessing Officer

to recompute the penalty u/s 18(1)(a) of the Wealth-tax Act, 1957 ?

The assessee is an individual and the concerned assessment year is 1984-85. Though the return under the Wealth-tax Act was due to be filed

on June 30, 1984, the same was filed on March 24, 1986. Hence, action was initiated by the Assessing Officer u/s 18(1)(a) of the Act and while

completing the assessment proceedings, a penalty of Rs. 62,360 was ordered. The assessee was aggrieved and preferred the appeal before the

Commissioner of Wealth-tax (Appeals), who while upholding the penalty, remitted the matter to the Assessing Officer to revise the quantum of

penalty with reference to the net wealth after making a fresh assessment as per the directions of the Tribunal in W. T. A. No. 797 (Mds.) of 1989,

dated May 18, 1990. The Revenue therefore carried the matter to the Tribunal and the Tribunal confirmed the order of the Commissioner of

Wealth-tax (Appeals), whereby the Commissioner of Wealth-tax (Appeals) had upheld the levy of penalty and the remittance only for the quantum

in pursuance of the fresh assessment framed.

We were taken through the order of the Tribunal, wherein the Tribunal has categorically held that while dealing with the quantum appeal relating

to the assessment year 1984-85, the Tribunal in its order dated May 18, 1990, had observed that the unquoted equity shares held by the assessee

should be valued on yield method and not under rule 1D and restored the matter to the file of the Assessing Officer to determine the value of the

shares held by the assessee afresh on yield basis. It further held that the quantum appeal had been restored to the Assessing Officer for making a

fresh assessment on the lines indicated by the Tribunal. The Tribunal further observed that this being so, the direction given by the Commissioner

(Appeals) that the quantum of penalty to be levied u/s 18(1)(a) should be revised as per the fresh assessment to be made by the Assessing Officer

on the lines suggested by the Tribunal''s order dated May 18, 1990.

It is further reported now before us that the order of the Tribunal has been upheld on the merits in so far as the assessment is concerned and has

been throughout maintained up to this court. In that view, it is clear that the penalty would have to be recalculated in the light of the fresh

assessment by the Assessing Officer. In that view, it will have to be held that the Appellate Tribunal was right in law in directing the recalculation of

the penalty u/s 18(1)(a) of the Wealth-tax Act, 1957. The reference is therefore answered accordingly in favour of the assessee.