Law:

Section:

Section 18(1)(c) of the Wealth-tax Act, 1961 - Penalty - For concealment of income - Assessment years 1965-66 to 1968-69 - There were certain credits in capital account as well as third parties' accounts in books of assessee in earlier years - WTO held that these liabilities were not real and represented assessee's own money - These were added to net wealth of assessee which was upheld by Tribunal - Thereafter penalty proceedings under section 18(1)(c) were initiated -Whether in absence of cogent material evidence that assessee had concealed particulars of his income or had deliberately furnished inaccurate particulars it could be said that assessee concealed particulars of its net wealth and, thus, was liable to pay any penalty under section 18(1)(c) - Held, no FACTS For the assessment years 1962-63 and 1963-64 there appeared certain credits in the capital account as well as third parties' accounts in the books of the assessee. While completing the assessments for the assessment years 1965-66 to 1968-69 the WTO held that these liabilities were not real and represented the assessee's own moneys. He, therefore, added these in the net wealth of the assessee which was upheld by the Tribunal. Thereafter, penalty proceedings were initiated against the assessee under section 18(1)(c). The I AC held that the provisions of section 18(1)(c) were attracted and imposed penalties. However, on appeal the Tribunal deleted the aforesaid penalties. On reference: HELD The Supreme Court in the case of CIT v. Anwar AH [1970] 76 ITR 696 while dealing with the provisions of section 28(1)(c) of the Indian Income-tax Act, 1922 held that in the absence of cogent material evidence apart from the falsity of the respondent's explanation, from which it could be inferred that the respondent had concealed the particulars of his income or had deliberately furnished inaccurate particulars in respect of the source and that the disputed amount was a revenue receipt, the penalty could not be imposed. No doubt, the word 'deliberately' occurring in section 28(1)(c) of the Indian Income-tax Act, does not now occur in section 18(1)(c) of the Wealth-tax Act. However, the omission of that word does…

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