TaxTMI 
TaxTMI 
2006 (8) TMI 134
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....) of the Act on the net wealth of Rs. 27,52,700 and penalty under section 18(1)(c) of the Act was also initiated in the course of assessment proceedings. The penalty proceedings were completed ex parte and a sum of Rs. 51,420 was imposed as penalty. The appeal preferred by the respondent-assessee was allowed by the Commissioner of Income-tax (Appeals) on the ground that no penalty under section 18(1)(c) can be levied as he had not filed return for this year. According to the Commissioner of Income-tax (Appeals) unless an assessee submits a return actually concealing particulars of his net wealth, he could not be said to have concealed wealth or to have furnished inaccurate particulars thereof and consequently in such cases no penalty can be levied. The case of the assessee does not fall under any of the Explanations to section 18(1)(c) of the Act as he has been previously assessed. The Revenue's appeal preferred before the Tribunal has been dismissed. We have heard Sri A.N. Mahajan, learned standing counsel appearing on behalf of the Revenue. Nobody has appeared on behalf of the respondent-assessee. Learned standing counsel submitted that in respect of the notice issued under sec....
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....he computation of the net wealth of any person under this Act,- (A) such person fails to offer an explanation or offers an explanation which is found by the Wealth-tax Officer or the Appellate Assistant Commissioner or the Commissioner (Appeals) to be false, or (B) such person offers an explanation which he is not able to substantiate: then, the amount added or disallowed in computing the net wealth of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the value of the assets in respect of which particulars have been concealed: Provided that nothing contained in this Explanation shall apply to a case referred to in clause (B) in respect of any amount added or disallowed as a result of the rejection of any explanation offered by such person, if such explanation is bona fide and all the facts relating to the same and material to the computation of his net wealth have been disclosed by him. Explanation 3.-Where any person who has not previously been assessed under this Act fails, without reasonable cause, to furnish within the period specified in clause (a) or, as the case may be, clause (b) of sub-section (1) of sect....
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....ammatical point of view the words 'inaccurate particulars of such turnover' in clause (b) of section 15A(1) refer back to clause (a) where the return under section 7 is specified. In other words, clause (b) refers to default in respect of a return furnished under section 7 and cannot possibly refer to any default in respect of anything done by the assessee in a proceeding under section 21. As there is no question of furnishing a return of a turnover in a proceeding under section 21, the assessee cannot be guilty of concealing particulars of its turnover from, or of furnishing inaccurate particulars, in a proceeding under section 21. The concealment or furnishing inaccurate particulars must be in the return furnished under section 7. Clause (a) of section 15A(1) deals with the failure of the assessee to furnish the return of the turnover, which he is required to furnish under section 7 or the failure of the assessee to furnish it within the time allowed or in the manner prescribed. Clause (b) of that section deals with the concealment or inaccurate furnishing of particulars of the turnover in respect of which the return was required to be filed and which is referred to in clause (a)....
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....a return of his income intimating the Income-tax Officer that his income is nil. It seems to me that the language of section 28(1) does not admit of any such construction since the clear requirement of the provisions of this sub-section is that an assessee on whom a penalty is proposed to be imposed under section 28(1)(b) should have in the first instance furnished his return. That, in my opinion, is the ordinary and grammatical meaning of the words occurring in the Act. To interpret the language of this provision in the manner suggested by the learned Government Pleader would, in my opinion, be too artificial and too far-fetched to commend itself for acceptance. Although it is true that the provisions of a statute like those contained in section 28(1)(b) have to receive a construction so as to promote the object of the statute, it is clear that when we interpret a penal provision like that contained in section 28(1)(b), the interpretation we should place upon it must accord with reason and justice and must be in accordance with the plain ordinary and rational meaning of the words contained in those provisions. So interpreted, I would not, in my opinion, be right in placing on sect....
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....some circumstances found from which it can be gathered that the omission was attributable to an intention or desire on the part of the assessee to hide or conceal the income so as to avoid the imposition of tax thereon. In order that a penalty under section 271(1)(iii) may be imposed, it has to be proved that the assessee has consciously made the concealment or furnished inaccurate particulars of his income. Where the additions made in the assessment order, on the basis of which penalty for concealment was levied, are deleted, there remains no basis at all for levying the penalty for concealment and, therefore, in such a case no such penalty can survive and the same is liable to be cancelled as in the instant case. Ordinarily, penalty cannot stand if the assessment itself is set aside. Where an order of assessment or reassessment on the basis of which penalty has been levied on the assessee has itself been finally set aside or cancelled by the Tribunal or otherwise, the penalty cannot stand by itself and the same is liable to be cancelled as in the instant case ordered by the Tribunal and later cancellation of penalty by the authorities." We are in respectful agreement with the pr....