Gauhati H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the calculation of penalty up to 31st March, 1969 was to be made under s. 18(1)(i) of the WT Act, 1957, as it originally stood from 1st April, 1965, to 31st March, 1969, 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 ?

Counsel Appeared

J. P. Bhattacharjee, C. C. Deka, N. C. Phukan, B. Malakar & K. Bashak, for the Assessee : None appeared, for the Revenue

A. RAGHUVIR, C. J.:

Tapan Kumar Baruah is the assessee in this case. The reference in this case is made under sub-s. (1) of s. 27 of the WT Act, 1957. The following question is referred : “Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the calculation of penalty up to 31st March, 1969 was to be made under s. 18(1)(i) of the WT Act, 1957, as it originally stood from 1st April, 1965, to 31st March, 1969, 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 ?” This case relates to five orders of penalty in relation to the assessment years 1964-65, 1965-66, 1966-67, 1967-68 and 1968-69. For all the five years all through, a consolidt. order was passed by the Revenue authorities.

All the five returns were filed by the assessee on 31st Aug., 1969, but not on the due dates. The explanation offered by the assessee for the delay was not accepted and penalties were levied. The WTO divided the delay into two parts one up to 31st March, 1969, and the second the delay beyond 1st April, 1969, and imposed penalty of Rs. 5,776, Rs. 5,448, Rs. 5,170, Rs. 3,484 and Rs. 10,175, respectively. The penalty amounts were ascertained at the rate of 2 per cnet per month of the tax payable for the former period and for the latter period after 1st April, 1969, at the rate of = percent of the total wealth in the cases.

The AAC, Dibrugarh, on appeal, imposed the rate of penalty of 2 per cnet monthly of the total wealth-tax and modified the order subject to 50 per cnet of the total wealth-tax. In effect, the penalty referable to after 1st April, 1969, was overturned.

The Tribunal held that the assessee failed to submit returns under s. 14(1) of the WT Act, 1957, and that proceeding under s. 18(1)(a) was properly initiated. The Tribunal affirmed the penalties imposed by the WTO at the rate of 2 per cnet per month before 1st April, 1969, since he crossed the limit of maximum 50 per cnet of the total tax, and, therefore, directed that penalties be calculated for each completed month of default subject to a maximum of 50 per cnet of the tax payable. This part of the order was affirmed. The Tribunal further held that the WTO was justified in calculating the penalty at the rate of = per cnet on the total net wealth for the period beyond 1st April, 1969.

The question now is referred under s. 27(1) of the WT Act, 1957, for our opinion. Sec. 18(1)(i) of the WT Act, 1957, was amended by the WT (Amendment) Act, 1964, and thereafter is substituted by s. 24 of the Finance Act, 1969.

In Jain Bros. vs. Union of India (1970) 77 ITR 107, the Supreme Court held (headnote) : “It is obvious that for the imposition of penalty it is not the assessment year or the date of the filing of the return which is important but it is the satisfaction of the IT authorities that a default has been committed by the assessee which would attract the provisions relating to penalty. Whatever the stage at which the satisfaction is reached, the scheme of ss. 274(1) and 275 of the Act of 1961 is that the order imposing penalty must be made after the completion of the assessment. The crucial date, therefore, for purposes of penalty is the date of such completion.”

The ratio of this decision was not noticed in Suresh Seth’s case (1981) 129 ITR 328 (SC). Therefore, that case was declared per incuriam and was reversed in Maya Rani Punj vs. CIT (1986) 157 ITR 330 (SC). What is ordered by the Tribunal is in conformity with the ratio of the case in Maya Rani Punj’s case (supra). In that view, the Tribunal has committed no error. We answer the question referred in the affirmative, in favour of the Revenue and against the assessee.

No costs.

[Citation : 176 ITR 287]