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2000 DIGILAW 506 (DEL)

COMMISSIONER OF INCOME v. KUKU NARANG

2000-07-04

ARIJIT PASAYAT, D.K.JAIN

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ARIJIT PASAYAT,c. J. ( 1 ) 1. ON being moved by the Revenue under Section 27 (1) of the Wealth-tax Act. 1957 (for short the Act), the Income-tax Appellate Tribunal, Delhi Bench-C (for short the Tribunal) has referred following question for opinion of this Court: "whether on the facts and circumstances of the case the Tribunal was right in cancelling the penalty of Rs. 25,000/- levied u/s 18 (1) (c) of the Wealth-tax Act, 1957 ?" ( 2 ) 2. Factual position, as stated in the statement of the case, is as follows: For the assessment year 1971-72 assessee filed her return declaring net wealth of Rs. 1,36,083/ -. The Wealth-tax officer completed the assessment on a total wealth of Rs. 1,71,040/- During the assessment proceedings, the Assessing officer noticed two omissions on the part of the assessee. First omission related to remuneration receivable from M/s. J. Bond and Company Private Limited amounting to Rs. 18,700/ - and the second one related to income from boats receivable, amounting to Rs. 3,252/- which was disclosed at Rs. 1,134/ -. A number of other minor additions were also made while computing the wealth. Assessing officer was of the view that there was concealment of particulars in respect of assets or that the assessee had furnished inaccurate particulars thereby attracting levy of penalty provisions of Section 18 (1 ) (c) of the Act. Proceedings were initiated against the assessee. Since difference between the declared wealth and the assessed wealth exceeded Rs. 25,000/-, the Assessing Officer referred the matter to the Inspecting Assistant Commissioner (IAC for short) under Section 18 (3) of the Act for finalisation of penalty proceedings. In response to the notice issued by the IAC, assessee submitted her explanation. After considering the same, the IAC levied penalty in respect of the two items referred to above. The matter was carried in appeal before the Tribunal by the assessee. It was contended that there was bona fide omission and there was no conscious concealment of wealth and no contumacious conduct was involved. The Revenue s stand was that there was deliberate concealment and/or omission, clearly attracting the provisions of Section 18 (1 ) (c) of the Act. The Tribunal accepted the plea of the assessee that the omissions were bona fide and capcelled the notice. The Revenue s stand was that there was deliberate concealment and/or omission, clearly attracting the provisions of Section 18 (1 ) (c) of the Act. The Tribunal accepted the plea of the assessee that the omissions were bona fide and capcelled the notice. It was inter alia observed by it as follows: "before us these conclusions of the IAC have been assailed and we are of the opinion that there is force in the appellant s argument. So far as the income from boats is concerned, the copy of the particulars of wealth filed along the return, which is at pages 1 and 2 of the paper book, would show that although the value of the boat income is mentioned at Rs. 1133. 83 it has been specifically pointed out that the amount was taken provisionally and the exact figure shall be submitted at the time of assessment. This has been done by putting an asterisk (1) mark against the item so that it was not a case of concealment at all. Regarding the other item, namely, the amount receivable from M/s. J. Bond and Company, it is not the case of the Department that this item was never mentioned in the return. In fact, this item has been continuously mentioned even earlier as the return for the A. Y. 1970-71 shows. There the amount mentioned was Rs. 6,700/ -. During the current year another Rs. 12,000/- were added and a certificate of M/s. J. Bond and Company at page 13ofthepaperbookwouldshowthatasumofrs. 14. 400/-waspaidtothe appellant as remuneration from 1-4-1970 to 31-3-1971 and even income-tax was deducted on this amount. It is contended by the appellant that at the time of preparing the return the clerk concerned thought that all these amounts had already been received by the appellant, and, therefore, nothing was left receivable. No doubt, it is a mistake and rather a serious mistake, but one thing is certain that there could not have been any intention to defraud the taxation department because the heading remuneration receivable from J. Bond and Company Pvt. Ltd. is specifically mentioned in the statement showing the particulars of wealth. "