C.M.lodha, C.J. - (1.) THESE are four connected applications under s. 27(3) of the WT Act, 1957 (which will hereinafter be referred to as "the Act") for requiring the ITAT, Jaipur, to state a case and refer the following questions of law arising out of its order dt. 13th Oct., 1977, passed in WT Appeals Nos. 74(JP)/ 76- 77, 75 (JP)/76-77, 76(JP)/76-77 and 77 (JP)/76-77-- "(i) Whether, on the facts and in the circumstances of the case, the ITAT was right in holding that the order passed by the WTO on 1st Nov., 1973 was an order under s. 18(1)(c) of the WT Act, 1957 and not an order giving effect to the order of the CWT passed under s. 18(2A) of the WT Act, 1957 and therefore, an appeal would lie before the AAC and the Tribunal ?." (ii) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the conduct of the assessee was not contumacious or dishonest and was right in cancelling the penalties ?"
(2.) THE asst. yr. under consideration in all the cases is 1970-71. THE facts in these cases are more of less identical and for our purposes it would be sufficient to state the facts of one case. We take case no. 69 of 1978 : THE original assessment under s. 16(3) of the Act was completed on 31st March, 1971. THE Assessee failed to disclose the value of the shares of M/s Lila Sons Breweries (P) Ltd. Bhopal, amounting to Rs. 15,000/-. However, he filed revised return on 13th Jan., 1972, on the bases of which the WTO passed an order of re-assessment under s. 17 of the Act and included the valuation of the said shares. It may be stated, here, that the WTO started the proceedings for re-assessment against the assessee in order to tax the excepted wealth by his notice dt. 5th Feb., 1972. At the time of passing the order for re-assessment, the WTO also initiated penalty proceedings under s. 18 (1)(c) of the Act and issue notice under s. 18(2) r/w s. 18(1) (c) of the Act to the assessee. Apprehending imposition of penalty, the assessee had already moved an application before the CWT under s. 18 (2A) of the Act on 6th Jan., 1972, stating therein that on account of bonafide mistake on his part, the value of the shares had not been disclosed in the original return, and therefore, it was prayed that the penalty imposable may either be waived or reduced. THE CWT by his order dt. 3rd Oct., 1973, reduced the penalty from impossible penalty of Rs. 15,000/- to Rs. 7,500/. In pursuance of the aforesaid order of the Commr., the WTO, by his order dt. 1st Nov., 1973, issued a demand notice and challan for the amount of penalty of Rs. 7,500.- as determined by the Commr. THE assessee thereupon preferred an appeal from the order of the WTO to the AAC, Bikaner Range, Bikaner, who by his order dt. 21st May, 1976, dismissed the appeal holding that the order of the Commr. could not be questioned. Aggrieve by the order of the AAC, the assessee filed further appeal before the ITAT before whom a preliminary objection was taken on behalf of the Revenue that no appeal lay under s. 18(2A). THEre was, however, a difference of opinion between the Judicial Member of the Tribunal and the Accountant Member. THE Judicial Member held that the appeal was entertainable and that no penalty could have been levied. THE learned Accountant Member was however, of the view that no appeal lay to the Tribunal and in this view of the matter, he directed that the appeal be rejected a not maintainable. THEre being difference of opinion between the two members of the Tribunal, the questions were referred to the president of the Tribunal under s. 24(2) of the Act. THE learned third member, to whom the matter was referred, held that an appeal does lie against the impugned order passed by the WTO and thus concurred in the view taken by the judicial member. Since the Accountant Member had not given his opinion on merits of the appeal, the matter again came up for consideration before the Accountant Member who agreed with the findings arrived at by the Judicial Member on merits, with the result that the appeal filed by the assessee was allowed and the order imposing penalty was quashed. It is sufficient to state that the Tribunal passed a consolidated order in respect of all the four appeals as the points in controversy were identical. Thereafter, the CWT moved an application under s. 27(1) of the Act before the Tribunal requiring it to draw up a statement of the case and refer two questions of law arising out of it. The Tribunal, however, by its order dt. 24th April, 1978, dismissed the application holding that no question of law arose out of its order. Consequently, this application has been made to this Court under s. 27(3) of the Act. No body has appeared on behalf of any of the assesses in these cases. Consequently, we have heard the learned counsel for the Department Ex parte. It is urged that the question regarding maintainability of the appeal is a pure question of law and since there is no decided case on the point either of the Supreme Court or of this Court, the Tribunal should have stated the case and referred the question of law arising out of its order. We have also perused the relevant orders of the Tribunal and are satisfied that a question of law arises out of the Tribunal's order dt. 13th Oct., 1977. We may state, here, that the second question submitted before the Tribunal is not a question of law, but is a question of fact and in the circumstances of the case, it would not arise, if the answer to the first question is returned in the negative. However, if the answer to the first question is returned in the affirmative then, as an inevitable consequence, the assessee would succeed as the finding on the second question which is one of the fact is in his favour. Accordingly, we allow these applications in part and direct the Tribunal to state a case and refer the following question to this Court : "Whether on the facts and circumstances of the case, the ITAT was right in holding that the order passed by the WTO on 1st Nov., 1973 was an order under s. 18(1)(c) of the WT Act, 1957 and not an order giving effect to be order of the CWT passed under s. 18(2A) of the WT Act, 1957, and therefore, an appeal would lie before the AAC and the Tribunal." The reference may by submitted within six months of the receipt of the order. there will be no order as to costs of these applications.;