V.K.SINGHAL, J. - (1.) THE Income -tax Appellate Tribunal has referred the following question of law arising out of its order dated March 18, 1992, in respect of the assessment year 1970 -71 under Section 27(1) of the Wealth -tax Act, 1957 : 'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the order of the Appellate Assistant Commissioner cancelling the penalty of Rs. 25,485 levied under Section 18(1)(a) of the Wealth -tax Act, 1957 ?'
(2.) THE brief facts of the case are that the assessment of the assessee was completed ex parte on September 27, 1977, and penalty proceedings for late filing of the return were also initiated simultaneously. The return was filed on August 28, 1972, which was required to be filed on July 31, 1972, and as such notices were given to provide opportunity to the assessee as to why the penalty be not imposed. No reply was filed and the Wealth -tax Officer found that the assessee has committed default without any cogent reason and a penalty of Rs. 25,485 was imposed. Against the order of the Wealth -tax Officer, an appeal was preferred to the Appellate Assistant Commissioner of Income -tax, Kota Range, Kota, and a contention was raised that the Hindu undivided family has totally been disrupted on May 27, 1970. The Appellate Assistant Commissioner found that partition of the Hindu undivided family was effected by metes and bounds on May 27, 1970, and the same has been accepted by the order of the Income -tax Officer under Section 171(3) of the Act dated March 31, 1975. The existence of the Hindu undivided family on the date of initiation of the penalty proceedings as well as on the date of imposition was not found. It was also found that by the order dated February 7, 1981, passed under Section 20 of the Wealth -tax Act, the complete partition of the Hindu undivided family was accepted by the Wealth -tax Officer with effect from May 27, 1970. Since the Hindu undivided family was not in existence, the penalty was set aside. The second appeal by the Revenue before the Income -tax Appellate Tribunal was also unsuccessful and the Tribunal came to the conclusion that on a plain reading of Section 20 of the Wealth -tax Act, it is clear that there is no provision for imposing penalties in the case of disrupted Hindu undivided families on total partition of the family while there are specific provisions for imposing penalty in Section 20A(b) of the Wealth -tax Act and Section 171(8) of the Income -tax Act and in the absence of such provisions in Section 20, the order cancelling the penalty was upheld.
(3.) THE submission of learned counsel for the Revenue is that penalty is in the nature of additional tax and if there is liability of tax, penalty could be levied for any default in not making the payment of such tax or other matters relating thereto. Reliance has been placed on the decision of the Madras High Court in the case of CGT v. C. Muthukumaraswamy Mudaliar : [1975]98ITR540(Mad) . We have gone through that judgment and the principle enunciated by the Madras High Court is that the amendment in the Act would not be applicable to the defaults committed before the amendment came into force and the law applicable to the levy of penalty is such as it stood at the time when the default was committed and notas it stood when the assessment was made nor the law as it stood when the penalty proceedings were initiated or the penalty was imposed. This judgment is of no assistance because there is no amendment in the law on which reliance has been placed. The decision in the case of CWT v. Ram Narain Agrawal : [1977]106ITR965(All) has also been relied upon wherein the Allahabad High Court said that the penalty proceedings are quasi -criminal in nature and, as such, it is imperative that they should be construed strictly. The law operative on the date when the infringement takes place is the law applicable unless it is made applicable ex post facto. It is well -settled that fiscal statutes cannot be regarded as retrospective by implication. The rule against retrospective operation applies with greater rigour in the case of penal provisions. We have gone through this judgment, ft was a matter with regard to levy of penalty under Section 18(1)(a) of the Wealth -tax Act in respect of the assessment years 1964 -65 to 1967 -68. The returns were filed after due date and penalty for filing the return late was incurred from April 1, 1969. The Revenue proposed to levy the penalty on the basis of the enhanced rate of penalty. The rate of penalty as prevailing when the default was committed was held applicable. It was not a case of disrupted Hindu undivided family. Reliance has also been placed on the cases of CWT v. P. C. M. Sundarapandian : [1978]114ITR367(Mad) and CWT v. C.S. Manvi : [1978]114ITR417(KAR) .;