Law:

Section:

Section 18(4) of the wealth-tax act, 1957-Penalty-Reference to IAC-For assessment years 1957-58 to 1964-65, wto imposed penalty on 15-12-1971 for default in submitting returns-Whether penalty could bb cancelled on the ground that iac's approval under section 18(4) which was in force on date of commission of default, had not been obtained, though said provision stood deleted with effect from 1-4-1965-Held, no Facts For the assessee's default in submission of returns for the assessment years 1957-58 to 1964-65, the WTO imposed penalty on 15-12-1971. The AAC confirmed the WTO's order. Before the Tribunal, the assessee sought deletion of the penalty on the ground that before imposing the penalty the WTO had not obtained approval of the IAC as required by section 18(4) which was in force on the date of commission of the alleged offence. The revenue pointed out that the aforesaid provision had been deleted with effect from 1-4-1965. The Tribunal, however, upheld the assessee's contention and deleted the penalty. On reference : Held Although in the case of a penalty, it is the law operating on the date on which the wrongful act is committed that determines the penalty, it is well settled that there is an essential distinction between an offence and the prosecution of an offence. The former forms part of substantive law, the latter that of procedural law. In the instant case, the provision for obtaining prior approval of the IAC before imposing a penalty was procedural, and the Tribunal went wrong in holding that the old section 18(4) would govern the procedure even after its repeal. Moreover, there was no vested right in an assessee to have his case considered by the IAC before the imposition of penalty by the WTO. On the date when the order imposing the penalty was passed by the WTO, there was no provision of law requiring him to obtain the approval of the IAC. The Tribunal was, therefore, not justified in cancelling the penalty order. Case review Kapur Chand Pokhraj v. State of Bombay [1958] 9 STC 455 (SC) and CWT v. K. Butchaiah [1977] 108 ITR 324 (AP)relied on. Cases referred to Brij Mohan v. CIT [1979] 120 ITR 1 (SC), Kapur Chand Pokhraj v. State of Bombay [1958]…

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