ADDITIONAL COMMISSIONER OF WEALTH-TAX Vs. JAMNALAL RAMLAL KIMTEE
LAWS(MPH)-1980-7-29
HIGH COURT OF MADHYA PRADESH
Decided on July 30,1980

ADDITIONAL COMMISSIONER OF WEALTH-TAX Appellant
VERSUS
Jamnalal Ramlal Kimtee Respondents




JUDGEMENT

- (1.)By this reference under Section 27(1) of the W.T. Act, 1957, hereinafter called the Act, the Income-tax Appellate Tribunal, Indore Bench, has referred the following question of law to this court for its opinion :
"Whether, on the facts arid in the circumstances of the case, the Tribunal was right in law in cancelling the eight penalties for the wealth-tax assessment years 1957-58 to 1964-65 by holding that the law governing these penalties will be as contained in Section 18(1)(a) before its amendment by the Wealth-tax (Amendment) Act, 1964 (Act 46 of 1964) w.e.f. April 1, 1965, which required the prior approval of the Inspecting Assistant Commissioner of Wealth-tax before the Wealth-tax Officer could impose a penalty and not the provisions of Section 18(1)(n) as amended by the Finance Act, 1969 -

(2.)The material facts giving rise to this reference, as set out in the statement of the case, briefly are as follows : By an order dated December 15, 1971, the WTO imposed a penalty on the assessee for default in submitting the returns for the assessment years 1957-58 to 1964-65. The assessee preferred appeals before the AAC, but those appeals were dismissed. The assessee then preferred further appeals before the Tribunal, and it was contended on behalf of the assessee that the order of penalty was passed by the WTO without obtaining the prior approval of the IAC, a requirement prescribed by Sub-section (4) of Section 18 of the Act, which was in force on the date when the alleged defaults were committed. On behalf of the Department, it was contended before the Tribunal that the provision, regarding the prior approval of the IAC to be obtained before imposing a penalty, was removed by an amendment to Section 18 by the W.T. (Amend.) Act, 1964 (Act 46 of 1964), which came into force with effect from April 1, 1965. The Tribunal, however, upheld the contention advanced on behalf of the assessee and quashed the order of penalty. At the instance of the Department, the Tribunal has referred the aforesaid question of law to this court.
(3.)Before we appreciate the contention advanced on behalf of the Department, it would be useful to refer to the necessary provisions of the Act. Prior to the amendment of Section 18 with effect from April 1, 1965, Sub-section (4) of that section provided as follows ;
''(4) The Wealth-tax Officer shall not impose any penalty under this section without the previous approval of the Inspecting Assistant Commissioner of Wealth-tax."



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