Wealth tax---

----Penalty---Appeal---Delay in filing Returns---Wealth Tax Officer giving effect to order of Commissioner of Wealth Tax---Appeal does not lie from order of Wealth-Tax Officer.

The Wealth Tax Officer initiated penalty proceedings under section 18(1)(a) of the Indian Wealth Tax Act, 1957, for delay in filing returns for the assessment years 1969-70 to 1973-74. Before these proceedings were finalised the assessee moved the Commissioner of Wealth Tax under section 18B for waiver of penalty. The Commissioner passed an order under section 18B on March 8, 1977. The Wealth Tax Officer passed an order levying penalty in terms of the order passed by the Commissioner of Wealth Tax. The assessee filed an appeal against the order of the Wealth Tax Officer levying penalty.

Held, that, where the Wealth Tax Officer gives effect to the order of the Commissioner of Wealth Tax under section 18(2A)/18B on the application made by the assessee, such order of the Wealth Tax Officer was not appealable.

Amrik Singh v. CWT (1988) 170 ITR 656 (P and H) fol.

CWT v. B. Kempanna (1980) ITR 825 (Kar.) ref.

A.K. Mittal for the Commissioner.

None appeared for the Assessee.

JUDGMENT

S.S. SODHI, J.---The controversy here is with regard to the order passed by the Commissioner of Wealth-tax on the assessee's application under section 18(2A) of the Wealth Tax Act, 1957 (hereinafter referred to as "the Act"). Is the right of appeal against the order of the Wealth Tax Officer giving effect to such order of the Commissioner lost thereby?

There was delay on the part of the assessee in filing his wealth-tax returns for the assessment years 1969-70 to 1973-74. On this account, the Wealth Tax Officer initiated penalty proceedings under section 18(1)(a) of the Act. Before, however, these proceedings could be finalised, the assessee moved the Commissioner of Wealth-tax under section 18B of the Act for waiver of the penalty imposable for these years. The Commissioner, by his order of March 8, 1977, directed that the penalty leviable under section 18(1)(a) be reduced to the amount of wealth-tax demand raised by the Wealth-tax Officer for the relevant assessment years which were as under:

The Wealth Tax Officer, following the order of the Commissioner of Wealth-tax under section 18B of the Act, proceeded to pass an order levying penalty for these assessment years in terms of the order passed by the Commissioner. It was in appeal against this order before the appellate Assistant Commissioner and then before the tribunal that the question arose whether the order passed by the Commissioner under section 18B of the Act took away the right of appeal from the assessee against an order imposing penalty passed under section 18(1)(a) of the Act. It is in this factual background that the two questions set out below came to be referred:

"(1) Whether, on, the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in holding that the orders passed by the Wealth Tax Officer under section 18(1)(a) for the four years levying penalty in pursuance of and in conformity with the Commissioner of wealth-tax's order under sections 18(2A) and 18B of the Act is appealable before the appellate authorities despite the mandatory provisions of section 18B(5) of the Wealth Tax Act?

(2) Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in law in not sustaining the order of the Appellate Assistant Commissioner?"

There is a conflict of views with regard to the survival of the right of appeal after an order has been passed by the Commissioner under section 18B of the Act. The High Court of Karnataka in CWT v. B. Kempanna (1980) 146 ITR 825 has held that the right of appeal available to the assessee against an order of the Wealth Tax Officer imposing penalty under section 18(1)(a) of the Act is not lost or waived on an order being passed on his application under section 18(2A) which section 18B renders final. It being observed (at page 830):

"This is because the ambit and scope of section 18(2A) .is quite different and in no way affects the jurisdiction of the Wealth Tax Officer to decide about the questions arising under section 18(1)(a) of the Act as to the existence or non-existence of reasonable cause. The only effect the order of the Commissioner would have is that the minimum penalty to be levied by the Wealth Tax Officer would be in accordance with what is determined by the Commissioner if the minimum penalty is only reduced and not waived, and if it is waived, the Wealth Tax Officer is also bound not to levy an penalty. Apart from this, there is no other effect consequent on the order of the Commissioner under section 18(2A) so far as the jurisdiction of the Wealth Tax Officer is concerned in the matter of imposition of penalty."

A contrary view has, however, been taken by our Court in Amrik. Singh v. CWT (1988) 170 ITR 656, where it was held that, in proceedings for penalty initiated under section 18(1)(a) of the Act, where the Wealth Tax Officer gives effect to the order of the Commissioner passed under section 18(2A) on the application made before the Commissioner by the assessee, such order of the Wealth Tax Officer is not appealable. We are clearly bound by the judicial precedent provided by our own Court and, with respect, we also prefer the view expressed therein.

Both the questions referred are, consequently, answered in the negative, against the assessee and in favour of the Revenue. This reference is disposed of accordingly.

There will, however, be no order as to costs.

M.B.A./1644/T??????????????????????????????????????????????????????????????????????????????????? Questions answered,