Judgment:
M. G. MUKHERJI, C.J. :
This is a reference application under s. 27(3) of the WT Act, 1957 ('the Act') against the order of the Tribunal, Jaipur, with its Camp at Jodhpur, passed on 24th April, 1992, as arising out of reference application Nos. 24 to 40/JP/1992 for asst. yrs. 1961-62 to 1977-78. The CWT, Jodhpur, contends, inter alia, that there should be a reference on the following four questions :
'1. Whether, on the facts and in the circumstances of the case, the Honble Tribunal was justified in cancelling the penalty levied under s. 32 of WT Act, 1957, for non-payment of tax directed to be paid as per order of Settlement Commission dt. 29th December, 1983 ?
2. Whether, on the facts and in the circumstances of the case, the order of Tribunal cancelling penalty levied under s. 32 of WT Act, 1957, is not perverse especially in view of the fact that payment of wealth-tax in this case was prescribed by the order of Settlement Commission dt. 29th December, 1983, and not by s. 30 of WT Act, 1957 ?
3. Whether, on the facts and in the circumstances of the case, the Honble Tribunal was justified in holding that show-cause notice served on the assessee for initiation of recovery proceedings on 26th August, 1985 was invalid as the period granted to the assessee through the notice of demand dt. 21st August, 1985, has not expired ?
4. Whether, on the facts and in the circumstances of the case, the assessee was at all entitled to a period of 35 days for payment of tax from the date of a service of demand notice on 26th August, 1985, overriding the scheme of payment of wealth-tax agreed to be payable by the assessee as per para 23 of order of Settlement Commission dt. 23rd December, 1983 ?'
2. It would be necessary for us to narrate in a nutshell the background of the case. The respondent non-petitioner, for determination of his liability under the Act, for the asst. yrs. 1961-62 to 1977-78, made an application before the Settlement Commission. An order was passed on 29th December, 1983, delineating the manner in which payment of wealth-tax payable was to be effected. The extent of wealth was also determined but not the exact amount by way of quantum of the money to be paid by way of wealth-tax demand. The Settlement Commission, however, granted immunity to the respondent non-petitioner from levy of penalty under s. 15B and s. 18(1)(c) for all these years. It was directed, inter alia, that taxes and interest under s. 31(2) payable by the respondent would be paid by him in monthly instalments at the rate of Rs. 1 lakh, the first instalment starting from 15th March, 1984, till the demand of wealth-tax and interest be completely paid off. If he wanted to sell any property to liquidate the tax due, then the Department may issue a Tax Clearance Certificate under s. 230A of the IT Act, 1961, and the entire sale proceeds should be credited to the Government accounts. Later on, the Department moved an application before the Settlement Commission on 24th March, 1984, seeking directions for quantification of year-wise wealth-tax demand which is to be paid by the respondent-assessee and on 16th May, 1984, the Settlement Commission issued directions, which were to be treated as incorporated in the original order dt. 29th December, 1983, to the effect that the WTO would issue a notice of demand to the assessee taking into consideration the computation of net wealth in Annexure-I to XVI and after giving credit for taxes already paid by the assessee. It is contended that pursuant to these directions the WTO issued notice under s. 30 for all the assessment years intimating the assessee the year-wise demand payable. However, the WTO did not strike off the relevant paragraph in the demand notice which provided demand of payment within 35 days. Since the assessee did not effect the payment, except that a payment of Rs. 2 lakhs was paid up to 31st March, 1984, the AO initiated proceedings for recovery of the entire demand by a notice dt. 26th May, 1985, asking the assessee to state as to why he should not be held liable for the default as regards non-payment of sixteen instalments allegedly payable by him and as to why penalty for such default should not be levied against him.
3. In reply to the said notice, the assessee submitted a written reply, admitting that the notice was received by him on 21st August, 1985, and the time allowed for payment of tax upto 35 days did not expire. The AO, treating the assessee in-default, levied a penalty of Rs. 3,60,000 under s. 32 of the Act. Aggrieved by the order of the AO, the assessee filed an appeal before the CWT(A) and by an order dt. 4th April, 1988, the learned CWT(A) cancelled the penalty levied under s. 32, on the ground that the show-cause notice was issued before the due date of payment as per notice of demand issued by the AO. The CWT(A) came to a positive finding that the assessee could not be found as an assessee-in-default. Aggrieved by this order, the Department filed an appeal before the Tribunal, who vide its order dt. 5th April, 1991, concurred with the finding of the CWT(A) and dismissed the Revenues appeal. Against the aforesaid consolidated order dt. 8th August, 1991, of the Tribunal in the appeal, 17 references were filed. The Tribunal dismissed the applications under s. 27(1) on the ground that the basic finding was a finding of fact and penalty had been levied without waiting for the period of 35 days allowed in the notice and, therefore, the assessee could not be held to be in default. Thereafter, the Revenue sought a reference on the four questions as aforementioned.
4. The Revenue now files an application under s. 27(3). Calling for a reference on the aforesaid points over again, contending, inter alia, that despite substantial questions of law being agitated before the Tribunal, the Tribunal refused to refer the questions and that it would be appropriate on the part of this High Court to make a reference as prayed for. It was contended before us by Mr. Sundeep Bhandawat, the learned advocate appearing for the Revenue that the Tribunal failed to appreciate that the demand was a demand already determined by the Settlement Commission, whereby the Commission directed the instalments to be paid every month at the rate of Rs. 1 lakh with a further specific direction that the first instalment should become due from 15th March, 1984. The amount and the date of the instalments becoming due was made very much clear and hence the case ought to have been covered by the principles of s. 31(5) of the Act and no fresh notice was required to be served and even if served, it did not absolve the assessee from the liability for penalty. We fail to appreciate the point as stressed by Mr. Bhandawat inasmuch as the Settlement Commission did not quantify the exact amount which were to be recovered by way of the total wealth-tax amount and that apart, unless the amounts are specifically quantified by the AO, for which specific notice of demand are made, we do not think that the question of default of the assessee would at all arise. We agree with the finding as made by the Tribunal that these are basically questions of fact and that being so, we do not find any case made out for seeking reference under s. 27(3). The application accordingly, stands rejected.