Law: Wealth Tax Act, 1957

Section: 27(1),18(1)(a),19,2,17,14,15

Law: Income Tax Act, 1961

Section: 159

Wealth tax----- Legal representative---Penalty---Extent of liability of legal representa­tive ---Penalty cannot be levied on legal representative---Difference between Income Tax Act and Wealth Tax Act---Indian Wealth Tax Act, 1957, S.19. Subsection (3) of section 19 of the Wealth Tax Act, 1957, provides that the provisions of sections 14, 15 and 17 shall apply to an executor, administrator or other legal representative as they apply to any person referred to in those sections. Subsection (1) deals with the liability of legal representative to pay tax of a deceased person. Subsections (2) and (3) deal with the liability to assessment. Subsection (2) provides for initiating proceedings for assessment and determination of net wealth payable by the deceased person. It, therefore, has no application to a proceeding in relation to imposition of penalty. Sections 14, 15 and 17 contemplate and authorise initiation as well as continuance of proceedings for determining wealth tax on the basis of the return as well as on the basis of escapement of wealth against, inter alia, a legal representative. Therefore, the provisions of section 18 do not come within the ambit of section 19. At this juncture, it will be relevant to note that under section 159 of the Income Tax Act, 1.961, there is a clear prescription for continuance of proceedings, inter alia, for imposing penalty against a legal representative. Subsection (2) of section 159 of the Income-tax Act is contextually different from sub­section (3) of section 19 of the Wealth Tax Act. The position is not similar so far as proceedings under section 18 of the Act are concerned. Penalty cannot be levied on the legal representative. JUDGMENT ARIJIT PASAYAT, C.J.---On being moved by the Revenue, the following question has been referred by the Income-tax Appellate Tribunal, Delhi Bench "B" .(for short the "Tribunal"), under section 27(1) of the Wealth Tax Act, 1957 (for short "the Act"), for the opinion of this Court: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the order of the Appellate Assistant Commissioner, cancelling the penalties on the ground that no penalty could…

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