Gauhati H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that although the show-cause notices under s. 18(2) of the WT Act, 1957, were issued for non-compliance with the provisions of the notices under s. 14(2) of the WT Act, penalty orders imposing penalties for the default under s. 14(1) of the WT Act, 1957, for the asst. yrs. 1966-67 and 1968-69 were valid and were not void ab initio ?

Counsel Appeared

A. Sarma & Miss U. Baruah, for the Assessee : None appeared, for the Revenue

A. RAGHUVIR, C.J.:

S. Charan Singh is the assessee in this reference under s. 27(1) of the WT Act, 1957. The following are the two questions referred :

“(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that although the show-cause notices under s. 18(2) of the WT Act, 1957, were issued for non-compliance with the provisions of the notices under s. 14(2) of the WT Act, penalty orders imposing penalties for the default under s. 14(1) of the WT Act, 1957, for the asst. yrs. 1966-67 and 1968-69 were valid and were not void ab initio ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the order of penalty for the asst. yrs. 1966-67, 1967-68 and 1968-69, on the finding that the calculation of penalty for the default up to 31st March, 1969, was to be made under s. 18(1)(i) of the WT Act, 1957, as substituted w.e.f. 1st April, 1965, by s. 18 of the WT (Amendment) Act, 1964, and thereafter under s. 18(1)(i) as substituted by s. 24 of the Finance Act, 1969?”

2. In the two questions, the issue relates to levy of penalty for the three asst. yrs. 1966-67, 196768 and 1968-69. Returns for the three years were submitted by the assessee on 18th May, 1970, beyond the due dates. The WTO impose penalties of Rs. 14,505, Rs. 15,082, and Rs. 14,840, respectively. The AAC, Jorhat Range, on appeal, confirmed the decision and directed that the amount of penalties be modified. The Tribunal, on further appeal, held : “As a matter of fact, the AAC had allowed relief to the assessee even beyond the date of the submission of the return of net wealth as required under s. 14(2) of the Act. Therefore, the grievance of the assessee with reference to the asst. yrs. 1966-67 to 1968-69 in the context of pleas taken before us does not subsist at this stage.” (emphasis supplied)

We see in the first question that the assessment years are 1966-67 and 1968-69. In view of the fact that the issue does not “subsist” as held by the Tribunal, the first question does not call for any answer.

The second question, besides referring to asst. yrs. 1966-67 and 1968-69 also refers to the asst. yr. 1967-68. We have recorded, relevant to question No. (1), that the issue does not “subsist” for the asst. yrs. 1966-67 and 1968-69. The issue, however, subsists for the asst. yr. 1967-68 and requires to be answered.

We have today answered a like question in WT Ref. Case No. 8 of 1975 (T. K. Baruah vs. CWT (1989) 176 ITR 287 (Gau)(infra)), and in that we have followed the ratio in Maya Rani Punj vs. CIT (1986) 157 ITR 330 (SC). Following the above decision, we answer the second question in the affirmative, relevant to the penalty for the asst. yr. 1967-68, in favour of the Revenue and against the assessee.

No costs.

[Citation : 176 ITR 285]