SMT. MANORAMADEVI AGRAWAL VS COMMISSIONER OF WEALTH TAX
1998 P T D 354
[223 ITR 435]
[Madhya Pradesh High Court (India)]
Before A.R. Tiwari and N. K. Jain, JJ
Smt. MANORAMADEVI AGRAWAL
versus
COMMISSIONER OF WEALTH TAX
Miscellaneous Civil Case No.204 of 1991, decided` on 8th March, 1996.
(a) Wealth tax--- ---- Amensty Scheme---Amnesty Scheme did not suspend provisions of Wealth Tax Act---No promissory estoppel against the statute ---CBDT Circular No.423 dated 26-6-1985 and Circulars Nos. 432 and 441, dated 15-11-1985.
(b) Wealth tax---
---Penalty---Amnesty Scheme---Concealment of income---Failure to file returns on time---Returns submitted during operation of Amnesty Scheme on receipt of notice under S.17---Tax paid on self-assessment before expiry of Amnesty Scheme--Assessee entitled to benefit of Amnesty Scheme---Penalty could not be imposed for concealment of income or for failure to file returns on time---Wealth Tax Act, 1957, S.18---CBDT Circular No.423, dated 26-6-1985 and Circulars Nos.432 and 441, dated 15-11-1985.
The Amnesty Scheme contained in CBDT Circulars Nos.423, dated June 26, 1985 and 432 and 441, dated November 15, 1985, did not suspend the provisions of the Wealth Tax Act, 1957, and as such there could be no promissory estoppel against the statute.
The object behind the Amnesty Schemes was to induce persons to make disclosures and start paying the taxes without apprehension of facing prosecutions and suffering penalties. The undernoted factors are relevant in such matters: (a) The assessee makes full and true disclosure voluntarily and in good faith, before the expiry date of the Scheme, i.e. March 31, 1986; (b) the assessee pays the tax on the net wealth as disclosed before March 31, 1986; (c) the assessee cooperates in any enquiry relating to the assessment of his wealth.
The assessee was served with a notice under section 17 of the Wealth Tax Act, 1957, requiring her to file her returns of wealth for the assessment years 1977-78 to 1981-82 and onwards. The notices were served on March 3, 1986. The assessee filed the return of wealth on March 14, 1986, and paid the self-assessment tax. The assessment for all the five years was completed by a consolidated order, dated December 31, 1986. The Wealth Tax Officer initiated penalty proceedings under sections 18(1)(a) and 18(1)(c) of the Act as the returns were filed in response to notice under section 17 and not voluntarily as required under the Amnesty Scheme. The penalties were levied. This was upheld by the Tribunal. On a reference:
Held, that the following points were not in dispute, i.e., (a) the Amnesty Scheme was in force till March 31, 1986; (b) the returns were filed before the expiry of this period; (c) the assessee paid the tax as found due before the expiry of this scheme; (d) the notice under section 17 of the Act was issued during the currency of the scheme; (e) penalties were imposed on the ground of concealment and late filing of the returns. Hence, the assessee was entitled to the benefit of the Amnesty Scheme. The assessee was not liable to pay penalties under sections 18(1)(a) and 18(1)(c) of the Act.
CIT v. Hassomal (1996) 217 ITR 636 (MP) and Kareem Sons (Pvt.) Ltd. v. CIT (1992) 198 ITR 543 (Kar.) ref.
Nazir Singh for the Assessee.
D.D. Vyas for the Commissioner.
JUDGMENT
A.R. TIWARI, J.---At the instance of the assessee, the Tribunal stated the case and referred the undernoted question of law arising out of the orders passed in Wealth Tax Act Nos.93 to 96 and 100 to 104 (Ind) of 1989 on the applications registered as Revision Appeals Nos. 19 to 22 and 26 to 30 (Ind) of 1990 under section 27(1) of the Wealth-tax Act, 1957 (for short "the Act"), for our opinion:
"Whether, on the facts and circumstances of the case, the Tribunal was justified in holding that the Amnesty Scheme did not suspend the provisions of the Wealth-tax Act, 1957, and as such there was no promissory estoppel against the statute and the returns of Wealth filed by the assessee were not voluntary and, therefore, the assessee was liable to the penalties under sections 18(1)(a) and 18(1)(c) of the Wealth Tax Act, 1957?"
Briefly stated, the facts of the case are that the assessee is assessed as an individual. The years of assessment are 1977-78 to 1980-81 for penalties under section 18(1)(c) of the Act and 1977-78 to 1981-82 for penalties under section 18(1)(a) of the Act. The assessee was served with a notice under section 17 of the Act requiring her to file the returns of wealth for the assessment years 1977-78 to 1981-82 and onwards. The notices were served on March 3, 1986. The assessee filed the return of income on March 14, 1986, and paid the self-assessment tax. The assessment for all the five years was completed by a consolidated order, dated December 31, 1986. The Wealth Tax Officer initiated penalty proceedings under sections 18(1)(a) and 18(1)(c) of the Act. The penalties were levied as particularised in the statement of the case. The assessee contended that the Amnesty Scheme was in force till March 31, 1986, and she was planning to avail to the scheme to submit the returns. Before this could be done, she received the notice under section 17(1) of the Act. The returns were filed on March 14, 1986. The Wealth Tax Officer held that the returns were not liable to be treated as voluntary and levied penalty The assessee filed appeals which were dismissed by the Deputy Commissioner of Wealth Tax (Annexures "B-1" and B-2"). The assessee then filed the appeals before the Tribunal. She placed reliance on CBDT Circular No.423 see (1985) 155 ITR (St,) 45, dated June 26, 1985, and Circulars Nos.432 and 441 see 1985 156 ITR (St.) 162. 165. dated November 15, 1985, and contended that she was entitled to obtain the benefit of the scheme and was thus not liable to suffer penalty. The Tribunal, however, negatived the contention and dismissed the appeals. Aggrieved, the assesee filed applications under section 27(1) of the Act. The Tribunal then stated the case and referred the aforesaid question of law for our opinion.
We have heard Shri Nazir Singh, learned counsel for the applicant assessee, and Shri D.D. Vyas, learned counsel for the non-applicant- Department.
The following points are not in dispute---
(a) The Amnesty Scheme was in force till March 31, 1986;
(b) The returns were filed before the expiry of this period;
(c) The assessee paid the tax as found due before the expiry of this
scheme;
(d) The notice under section 17 of the Act was issued during the currency of the scheme;
(e) Penalties were imposed on. the ground of concealment and late filing of the returns.
It is not disputed before us that the assessee had the right to obtain the benefit of protective umbrella of the Amnesty-Scheme till March 31, 1986. The contention of the Department is that the returns were submitted though before the expiry of the scheme, after issuance of the notice under section 17 of the Act, the assessee became disentitled to obtain immunity from penalties.
The object behind such schemes is to induce the persons to make disclosures and start paying the taxes without apprehension of facing prosecutions and suffering penalties. The undernoted factors are relevant is such matters:---
(a) The assessee makes full and true disclosure voluntarily and in good faith, before the expiry date of the scheme i.e., March 31, 1986;
(b)The assessee pays the tax on the net wealth as disclosed before March 31, 1986;
(c) The assessee cooperates in enquiry relating to his assessment of wealth.
In the instant case, the Department has placed on material on record to show that the disclosure was not voluntary or was lacking in good faith. Even when the returns are filed after the notice, it can be legitimately contended that the assessee has cooperated in the enquiry. Hence, the condition is fully satisfied.
Counsel for the assessee has placed reliance on Kareem Sons (Pvt.) Ltd. v- . CIT (1992) 198 ITR 543 (Kar.) (FB) and CIT v. Hassomal (1996) 217 ITR 636 (MP). We do not see any justification for denying the benefit of the scheme to the assessee who elected to make full and true disclosure in the hope of getting the benefit of the scheme.
The Tribunal, therefore, erred in law in holding that the returns of wealth filed by the assessee were not voluntary and, as such, the assessee was liable to the penalties.
Ex consequenti, we hold that the returns were liable to be treated as voluntary and the assessee was entitled to be given immunity from penalties. We, therefore, bifurcate the question as under:
"(a) Whether, on the facts and circumstances of the case, the Tribunal was justified in holding that the Amnesty Scheme did not suspend the provisions of the Wealth Tax Act, 1957, and as such there was no promissory estoppel against the statute? and
(b) The returns of wealth filed by the assessee were not voluntary and, therefore, the assessee was liable to the penalties under sections 18(1)(a) and 18(1)(c) of the Wealth Tax Act, 1957?"
We answer part (a) above, in the affirmative, i.e., in favour of the Department, and part (b) in the negative, i.e., in favour of the assessee.
The question is answered as noted above. This case is, thus, disposed -of in terms indicated above, but without any orders as to costs. Counsel fee for each side is, however, fixed at Rs.750, if certified.
A copy of this order shall be forwarded to the Tribunal for further action as may be necessary under the law.
A.A./1342/FCOrder accordingly.