M.C. Jain, J. - (1.) THESE are 4 applications under Section 27(3) of the Wealth-tax Act directing the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, to state the case and refer the questions of law arising out of the Tribunal's order dated April 13, 1977, passed in wealth-tax appeals in respect of the assessment years 1968-69, 1969-70, 1970-71 and 1971-72.
(2.) WE may state here the brief facts giving rise to the present applications. The respondent, Akshay Kurnar Sanghi, was an assessee under the Wealth-tax Act. He submitted the returns for the assessment years 1968-69, 1969-70, 1970-71 and 1971-72. The valuation dates in respect of the above assessment years were 31st March, 1968, 31st March, 1969, 31st March, 1970, and 31st March, 1971, respectively. The assessee had shown value of his immovable property at Rs. 36,000 in his returns in respect of these assessment years. The Wealth-tax Officer after considering the evidence on record valued the property in question at Rs. 75,000, Rs. 80,000, Rs. 85,000 and Rs. 90,000 in respect of the aforesaid assessment years, respectively. The Wealth-tax Officer also initiated penalty proceedings under Section 18(1)(c) of the Wealth-tax Act. Since the minimum penalty leviable exceeded Rs. 25,000, the matter was referred to the Inspecting Assistant Commissioner of Wealth-tax. The Inspecting Assistant Commissioner was not satisfied with the explanation given by the assessee in his letters dated 8th and 16th April, 1976. According to him, the assessee had concealed his wealth and also furnished inaccurate particulars of his assets and so he imposed penalties of Rs. 34,000, Rs. 39,000, Rs. 44,000 and Rs. 49,000 for the assessment years 1968-69, 1969-70, 1970-71 and 1971-72, respectively. The assessee took up the matter before the Tribunal. The Tribunal, vide its order dated April 13, 1977, allowed the appeals preferred by the assessee and the orders imposing penalty passed by the Inspecting Assistant Commissioner were cancelled. The present petitioner submitted four applications in respect of the said assessment years for drawing up the statement of case and for making reference to this court on questions of law. The Tribunal after hearing the parties rejected the applications, vide its order dated July 24, 1977. The Tribunal referred to the following questions in its order rejecting the applications : "1, Whether, on the facts and in the circumstances of the case, the Tribunal was justified in cancelling the orders of penalties in respect of the assessment years 1968-69 to 1971-72 without considering Explanation 1(i) to Section 18(1)(c) of the Wealth-tax Act, according to which the burden was on the assessee to prove that the failure to return the correct value of the plot did not arise from any fraud or any gross or wilful neglect on his part? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that there is no positive material on record which would go to show that the assessee knowingly and deliberately did not disclose the value of the plot as assessed so as to warrant the conclusion that the asses-see has not concealed the particulars of the assets or furnished inaccurate particulars of any asset within the meaning of Section 18(1)(c) of the Wealth-tax Act, 1957?" The petitioner's case before us is that the petitioner sought reference of the following four questions : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in cancelling the orders of penalties in respect of the assessment years 1968-69 to 1971-72 without considering Explanation 1(i) to Section 18(1)(c) of the Wealth-tax Act, according to which the burden was on the assessee to prove that the failure to return the correct value of the plot did not arise from any fraud or any gross or wilful neglect on his part? 2. Whether, on the facts and in the circumstnaces of the case, the Tribunal was justified in holding that there is no positive material on record which would go to show that the assessee knowingly and deliberately did not disclose the value of the plot as assessed so as to warrant the conclusion that the asses-see has not concealed the particulars of the assets or furnished inaccurate particulars of any asset within the meaning of Section 18(1)(c) of the Wealth-tax Act, 1957? 3. Whether the finding of the Tribunal that no penalty was called for, on the facts and in the circumstances of the case, as the assessee in good faith showed the value of the plot in question on the valuation date is not sustainable in law as the Appellate Tribunal did not take into consideration the entire evidence, direct and circumstantial, which was taken note of by the Inspecting Assistant Commissioner while imposing the penalties in respect of the assessment years 1968-69 to 1971-72? 4. Whether, on the facts and in the circumstnaces of the case, the Tribunal was justified in cancelling the penalty levied under Section 18(1)(c) of the Wealth-tax Act, 1957, in respect of the assessment years 1968-69 to 1971-72?" It may be stated that whether the questions sought to be referred are as stated in the order of the Tribunal or are as stated in the 4 reference applications presented before this court are not very material. The whole question is as to whether the order of the Tribunal dated April 13, 1977, gives rise to any question of law which may necessitate the making of a reference by the Tribunal or which may require this court to issue a direction to the Tribunal to state the case to this court on any question of law. While rejecting the applications, the Tribunal has expressed an opinion that the orders do not raise any question of law. The finding which has been recorded by the Tribunal is essentially a finding of fact and in the opinion of the Tribunal, no question of law arises out of the Tribunal's order :
(3.) WE have heard Mr. B.R. Arora, learned counsel for the petitioner, and Mr. C.R. Mehta, learned counsel for the respondent-assessee. Mr. Arora, learned counsel for the Revenue, submitted that the Tribunal proceeded to determine the question as if the burden is on the Revenue. Once the valuation given by the assessee is not accepted and the assessee has been assessed on a higher valuation of the property, then the burden lies on the assessee to prove that the valuation which was given by him was not given as a result of fraud or any gross or wilful neglect on his part. According to Mr. Arora, the assessee has failed to discharge the burden and the Tribunal committed an error without looking to the entire material on record in observing that there was no positive material to establish that there was lack of bona fides on the part of the assessee. It was urged by Mr. Arora that the Tribunal ought to have taken into consideration as to what claim was advanced by the assessee in respect of the property before the Tribunal awarding the compensation. The assessee made a claim for Rs. 1,55,568 in respect of the plot in question as far back as in the year 1966. This fact was not disclosed by the assessee. The assessee rather tried to mislead the authorities in order to arrive at the correct valuation of the property. In such circumstances, the finding which has been arrived at by the Tribunal is not borne out from the evidence or material on record and the Tribunal was wrong in observing that no question of law arises from the Tribunal's order. We have carefully considered the submissions of the learned counsel for the petitioner and, in our opinion, the submissions are devoid of any force. We may extract the observations of the Tribunal which will show as to how the Tribunal has proceeded to consider the question. The Tribunal stated in its order as under; "In penalty proceedings, the assessee gave detailed explanation, vide letters dated 16th July, 1976 and 26th July, 1976. The copies of the letters are in the paper-book. The assessee explained in detail in those letters that the value of the land on the valuation dates was the same which was disclosed in the return. Inter alia, it was explained that the land was situated in Air Force area which was about 200 yards away and was very uneven in size as is clear from the following dimensions : North : 338 ft.; West: 288 ft.; South : 166 ft.; East: 357 ft. This land was requisitioned by the Collector, Jodhpur, on January 30, 1964, and the possession was also taken over on February 6, 1964. Ultimately, the land was acquired by the Government, vide Gazette Notification dated September 8, 1971, and the acquisition order was passed by the Collector, Jodhpur, on January 18, 1972, and the compensation was paid to the assessee on April 7, 1972. Thus the date of notification and the date of acquisition order both fell outside the valuation dates of the years under consideration. The assessee explained in detail that at the relevant valuation dates, the value of the land could not be more than the value disclosed in the return. Even originally the Wealth-tax Officer accepted the value of the plot in question as returned by the assessee. Later on, the Wealth-tax Officer reopened the assessment under Section 17 of the Act and enhanced the value of the plot in question. In appeal, the learned Appellate Assistant Commissioner of Wealth-tax accepted the value of the land as was returned by the assessee. On further appeal, the Tribunal has taken the value of the plot at Rs. 70,000, Rs. 75,000, Rs. 80,000 and Rs. 85,000 in respect of the assessment years 1968-69 to 1971-72, respectively. If we consider the entire material on record, it is clear that the assessee in good faith showed the value of the plot in question as on the valuation date. At that time he was not in the know that the value of the plot in question would be taken as discussed above. There were preponderance of probabilities as detailed in the two explanations referred to above and it was proved that there was no fraud or gross or wilful neglect on the part of the assessee in not returning the assessed value of the plot in question. There is no positive material on record which would go to show that the assessee knowingly and deliberately did not disclose the value of the plot as assessed. Thus, in our opinion, in the present case, there is no convincing evidence on record which would go to show that the assessee has concealed the particulars of any assets. Thus the learned Inspecting Assistant Commissioner erred in imposing penalties in question. Since we have decided the matter on facts, there is no necessity for deciding the other point raised by the learned counsel for the assessee." ;