TaxTMI 
TaxTMI 
2014 (1) TMI 415
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....rcumstances of the case, the order of the Appellate Tribunal holding that the assessee failed to file the valuer's report along with the return and ignoring the fact the said report was filed in course of assessment proceedings was based on irrelevant considerations ignoring the relevant material and therefore was perverse ? c) Whether on the facts and circumstances of the case,the Appellate Tribunal should have held that the penalty order passed by the Wealth (Income) Tax Officer under Section 18(1) of the Wealth Tax Act, 1957 without prior approval of the requisite authority under section 18(3) of the said act was void ab initio and without jurisdiction and authority of law ?" The facts and circumstances of the case briefly stated are as follows : There was a dwelling house situate at Premises No.12B, Mandeville Gardens, Kolkata, demolition whereof, was started after 31st March, 1988. During the financial year 1987-88 corresponding to the assessment year 1988- 89, the dwelling house was valued at Rs.55,000/- for the purpose of wealth tax, which was duly accepted by the department. The demolition started during the financial year 1988-89. In the corresponding assessment year 19....
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..../- The above fact was brought into the notice of the assessee by issuance of letter dt. 1.3.2000." The Income Tax Officer, in the circumstances, imposed penalty for both the assessment years, 1989-90 and 1990-91. The CIT(A) agreeing with the order of the Income Tax Officer upheld the imposition of penalty but reduced the amount thereof. The learned Tribunal did not interfere with the order of the CIT(A). Aggrieved by the order of the learned Tribunal, the present appeal was preferred and the aforesaid questions were framed. Mr. Murarka, learned advocate appearing in support of the appeal, submitted that there can be no question of any concealment when the valuation disclosed by the assessee was based on the views of a registered valuer. He added, that the finding that the valuer had valued the property at Rs.6,07,000/-, but the assessee, in fact, returned a sum of Rs.6,00,000/-, was a mistake on the part of the Income Tax Officer because it would appear from the first assessment order dated 30th March, 1992 that the assessee had really valued the property at Rs.6,07,000/-. The second submission advanced by Mr. Murarka was that there was no question of any imaginary figure havin....
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....eturn, which was in use at the relevant time. He submitted that the form no where requires the assessee to annex a copy of the valuation report along with the return. The valuation report was duly submitted at the time of hearing and therefore, the fault found by the authorities including the ITO is without any basis. Mr. Murarka contended that the view taken by the authorities including the Tribunal that there was concealment or inaccurate particulars given as regards the valuation of the property in question was without any merit. He drew our attention to Section 7 of the Wealth Tax Act which provided the method of valuation of the property. Sub Section (1) of Section 7 of the Wealth Tax Act provided as follows;- "7. Value of assets how to be determined.- (1) Subject to the provisions of subsection (2), the value of any asset, other than cash, for the purposes of this Act shall be its value as on the valuation date determined in the manner laid down in Schedule III". Part B of schedule III deals with the valuation of immovable properties on rental method. He submitted that the valuation should have been made or could have been insisted upon by the Revenue to be made only in ac....
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....ame proposition he relied upon a judgment in the case of Sudarshan Silks and Sarees vs. Commissioner of Income-Tax, reported in 300 ITR 205 SC). He drew our attention to the following passage from page 213: "In the present case, the question of law referred to the High Court for its opinion was, as to whether the Tribunal was right in upholding the findings of the Commissioner of Income-tax (Appeals) in cancelling the penalty levied under section 271(1)(c). Question as to perversity of the findings recorded by the Tribunal on facts was neither raised nor referred to the High Court for its opinion. The Tribunal is the final court of fact. The decision of the Tribunal on the facts can be gone into by the High Court in the reference jurisdiction only if a question has been referred to it which says that the finding arrived at by the Tribunal on the facts is perverse, in the sense that no reasonable person could have taken such a view. In reference jurisdiction, the High Court can answer the question of law referred to it and it is only when a finding of fact recorded by the Tribunal is challenged on the ground of perversity, in the sense set out above, that a question of law can be s....
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....furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of wealth, assessment, notice, summons or other proceeding if such return of wealth, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act. He contended that the submission that the Income Tax Officer had no jurisdiction to impose penalty exceeding a sum of Rs.10,000/- without the approval of the Deputy Commissioner is a question of fact which was never raised by the assessee at any stage and, therefore, cannot be permitted to be raised at this stage. Mr. Murarka in reply submitted that Explanation 4 appended to Section 18 of the Wealth Tax Act was never invoked against the assessee. He added that Explanation 4 is nothing but a rule of evidence. The authorities were at liberty to apply the rule of evidence at their choice which they did not do. Therefore, it is a no good now saying that the rule of evidence which was not applied....
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....urtenant to a building which is not the case before us. Considering that the Act provides for valuation in the manner indicated therein, it is difficult if not impossible to hold that any other mode of valuation is permissible. Therefore, the first question is answered in the negative. Considering the answer given by us to the first question, the second question has become redundant. In any case, we hold that filing of the valuation report along with the return was not mandatory. Production of the same at the time of hearing was enough. The assessee cannot be denied a right to adduce evidence to substantiate his contention at the hearing. The second question is, therefore, answered in the affirmative. The Income Tax Officer had no jurisdiction to impose penalty exceeding a sum of Rs.10,000/- except with the approval of the Deputy Commissioner. Mr. Agarwal submitted that it is a question of fact. We are unable to accept this submission. It was the obligation of the Income Tax Officer to indicate in his order that he passed the order after obtaining requisite approval. Since the order passed by the Income Tax Officer does not contain the requisite recital, it has to be held that no....