TaxTMI 
TaxTMI 
2013 (8) TMI 644
X X X X Extracts X X X X
X X X X Extracts X X X X
....e aforesaid grounds of appeal are without prejudice to one another. 4. The Appellant craves leave to add, alter, amend, modify or delete any or all the aforesaid grounds of appeal." 2. Assessee-company had filed its return of wealth declaring taxable wealth at Rs.15,77,14,232/- . Assessing Officer (AO) accepted the return of wealth u/s.16(3) of the Wealth Tax Act,1957(Act) vide his order dated 3.3.2000.Later on during the course of income-tax assessment proceedings in the case of the assessee,it came to the notice of the AO that the assessee had let out the building owned by it to sister concerns and had received rent of Rs. 42.62 lacs for the year under consideration.He further found that wealth relatable to such properties was not offered for taxation as taxable wealth.He issued notice u/s.17 of the Act on 24.03.2003.In the said notice, AO informed the assessee that as per the schedule III of the Act the value of the let out property worked out to Rs.4.52 Crores,that why the above amount should not be added to its net wealth for the year under consideration and taxed accordingly.After considering the submissions of the assessee,the AO finalised the assessment order,u/s.16(3) r.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o concealment.He relied upon the cases of Mussadilal Rambharose (165ITR14-SC),K.R. Sadyappan(185 ITR 409),Jeevan Lal Shah (205 ITR 244),B. A.Balsubramaniam and Brothers Co.(236 ITR 977) and K.P. Madhusudanan (251 ITR 99). Finally, he held that from the sequence of the events it was crystal clear that the assessee has not been able to substantiate the explanation offered by it before the AO,FAA and ITAT in respect of the addition of Rs. 2.18 Crores.He levied a minimum penalty of Rs.2.18 lacs (being 100% of tax sought to be evaded) u/s. 18(1)(c) of the Act. 2.3.Assessee preferred an appeal before the FAA.After considering the submissions of the assessee and the penalty order passed by the AO, he held that assessee-company did not make disclosure of the net wealth in its original return,that the submissions made by the assessee about the bona fide belief about the fact that premises let out to group companies were not includible in the net wealth was contrary to the provisiosn of law,that there was complete clarity in the provisions of the law,that the company had not to disclosed the asset which was subject matter of proceedings u/s.17of the Act,that claim made by the assessee about....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ject behind the enactment of Sec.18(1)(c) read with the Explanations indicates that the section has been enacted to provide for a remedy for loss of revenue.As the penalty u/s.18(1)(c) of the Act is a civil liability, so, willful concealment is not an essential ingredient for attracting it as is the case in the matter of prosecution under section 35A and other subsections. iv). For levying penalty u/s.18(1)(c)two facts should co-exit-first that value in question is part and parcel of the wealthof the assessee. Secondly,the assessee has filed inaccurate particulars or has concealed particulars of such wealth. v). Section 18(1)(c) has to be strictly applied in the larger interest of discipline in filing correct returns by the assessees. vi). Exemptions,concessions, rebates and deduction under the Act are available only to those assessees who make bona fide claimsAs a result,making a false claim in the wealth tax return with regard to exemption/concession /deduction is a prima facie proof of furnishing of inaccurate particulars. vii). Similarly,non-disclosure of value of the property/showing lower value of an taxable asset in the return is a prima facie evidence of concealing part....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e section cannot be camouflaged in terms of a bona fide mistake.It is therefore clear that the assessee had a taxable asset. ..........Furthermore, the assessee was not able to substantiate its contention that its belief in the non-assessability of non-agricultural land was a bona fide mistake.The findings recorded by the Tribunal are therefore based on the material and evidence on record and do not suffer from any legal infirmity.In view of the foregoing conclusions, we answer the questions referred to above in favour of the Revenue, against the assessee." In other words it can safely be held that if an assessee, disregarding all the relevant facts and circ -umstances,interprets a section that suits its interest then such interpretation cannot be held bona fide belief. x).It is duty of the assessee to explain to the AO as how he had not concealed particulars of his wealth or not furnished inaccurate particulars once he gets penalty notice.He has to discharge the burden as how his return did not contain any concealed wealth. On the touchstone of above referred broad principles we would like to test the facts of the case under consideration.From the facts available on the file,it....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... our opinion default committed by the assessee was not a technical or venial default,that could be taken lightly. Therefore, AO and FAA had rightly held that the provisions of section 18(1)(c)were applicable. As stated earlier, the rule of mensrea has to be established beyond all reasonable doubt in criminal cases, but not in a case of an economic offence-especially for levying penalty u/s.18(1) (c)of the Act. The object behind the enactment of Section18 (1)(c) read with the Explanations indicates that the section has been enacted to provide for a remedy for loss of revenue.After deliberating upon the conduct of the assessee and the facts of the case under consideration,we find that FAA had rightly upheld the order of the AO. 2.6.Now, we would like to discuss the cases relied upon by the AR.In the case of Reliance Petro Products Pvt. Ltd.(supra), Hon'ble SC has held as under: "A glance at the provisions of section 271(1)(c) of the Income-tax Act,1961, suggests that in order to be covered by it, there has to be concealment of the particulars of the income of the assessee. Secondly,the assessee must have furnished inaccurate particulars of his income.The meaning of the word "parti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he return of wealth. Therefore, judgment of Shankar Narayana Industries & Plantations Pvt.Ltd.(supra),is not relevant for deciding the issue before us. 2.6.b.In the case of Cement India Ltd.(supra)Hon'ble Apex Court has dealt with the provisions of MP General Sales Tax Act,1958 and the Central Sales Tax Act 1956.It has held that a return could not be treated "false" unless there was an element of deliberateness in it.In our humble opinion necessity of element of deliberateness is not part of the penalty provisions of the Act. Hon'ble Supreme court in the same case has held that even where the incorrectness of the return was claimed to be due to want of care on the part of the assessee and there was no reasonable explanation forthcoming from the assessee for such want of care, the court might, infer delibera - tion and the return may be liable to be branded as a false return. Thus,the case of Cement India Ltd.(supra) rather supports the FAA. We find that no reasonable explanation was filed by the assessee for non inclusion of taxable wealth in its return of wealth. 7. We agree that the assessment and penalty proceedings are different.During penal proceedings, assessee was issued a....