COMMISSIONER OF WEALTH TAX ADDL Vs. JAMNALAL RAMLAL KIMTEE

JUDGEMENT

(1.) BY this reference under s. 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 :

(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 aDBIC a requirement prescribed by sub -s. (4) of s. 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 s. 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.) THE aforesaid provision was deleted by the amending Act No. 46 of 1964, which came into force from April 1, 1965. The orders of assessment were passed by the WTO on December 19, 1969, when notice was directed to be issued to the assessee under s. 18(1)(a) of the Act, the impugned orders imposing penalty were passed by the WTO on December 15, 1971. On December 19, 1969, when notice under s. 18(1)(a) of the Act was issued by the WTO or on December 15, 1971, when penalty was imposed, the requirement about obtaining the prior approval of the IAC before passing an order imposing penalty had been dispensed with. The short question for consideration, therefore is whether the Tribunal was justified in holding that the order of penalty passed by the WTO was vitiated on account of failure to obtain the previous approval of the IAC before passing an order imposing the penalty.