Fifth Wealth Tax Officer Vs P D Store - Citation 62824 - Court Judgment

Judgment:

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			'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p align="justify">Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p align="justify">2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p align="justify">3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p align="justify">He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p align="justify">5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p align="justify">6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p align="justify">After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p align="justify">In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p align="justify">7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p align="justify">However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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		'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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	(int) 0 => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.',
	(int) 1 => '<p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.',
	(int) 2 => '<p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.',
	(int) 3 => '<p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.',
	(int) 4 => '<p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.',
	(int) 5 => '<p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.',
	(int) 6 => '<p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.',
	(int) 7 => '<p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.',
	(int) 8 => '<p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.',
	(int) 9 => '<p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.',
	(int) 10 => '<p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.'
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1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.

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			'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p align="justify">Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p align="justify">2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p align="justify">3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p align="justify">He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p align="justify">5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p align="justify">6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p align="justify">After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p align="justify">In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p align="justify">7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p align="justify">However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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		'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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	(int) 0 => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.',
	(int) 1 => '<p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.',
	(int) 2 => '<p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.',
	(int) 3 => '<p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.',
	(int) 4 => '<p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.',
	(int) 5 => '<p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.',
	(int) 6 => '<p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.',
	(int) 7 => '<p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.',
	(int) 8 => '<p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.',
	(int) 9 => '<p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.',
	(int) 10 => '<p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.'
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Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.

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	'title_for_layout' => 'Fifth Wealth Tax Officer Vs P D Store - Citation 62824 - Court Judgment | ',
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		'Judgement' => array(
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			'appellant' => 'Fifth Wealth-tax Officer',
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			'casename' => 'Fifth Wealth-tax Officer Vs. P.D. Store',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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			'decidedon' => '1987-04-10',
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			'judge' => 'R Sangani, R Garg',
			'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p align="justify">Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p align="justify">2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p align="justify">3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p align="justify">He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p align="justify">5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p align="justify">6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p align="justify">After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p align="justify">In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p align="justify">7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p align="justify">However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'judge' => 'R Sangani, R Garg',
		'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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	(int) 0 => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.',
	(int) 1 => '<p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.',
	(int) 2 => '<p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.',
	(int) 3 => '<p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.',
	(int) 4 => '<p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.',
	(int) 5 => '<p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.',
	(int) 6 => '<p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.',
	(int) 7 => '<p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.',
	(int) 8 => '<p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.',
	(int) 9 => '<p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.',
	(int) 10 => '<p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.'
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2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.

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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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			'judge' => 'R Sangani, R Garg',
			'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p align="justify">Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p align="justify">2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p align="justify">3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p align="justify">He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p align="justify">5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p align="justify">6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p align="justify">After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p align="justify">In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p align="justify">7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p align="justify">However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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		'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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	(int) 0 => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.',
	(int) 1 => '<p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.',
	(int) 2 => '<p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.',
	(int) 3 => '<p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.',
	(int) 4 => '<p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.',
	(int) 5 => '<p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.',
	(int) 6 => '<p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.',
	(int) 7 => '<p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.',
	(int) 8 => '<p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.',
	(int) 9 => '<p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.',
	(int) 10 => '<p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.'
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3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.

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	'title_for_layout' => 'Fifth Wealth Tax Officer Vs P D Store - Citation 62824 - Court Judgment | ',
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			'id' => '62824',
			'acts' => null,
			'appealno' => null,
			'appellant' => 'Fifth Wealth-tax Officer',
			'authreffered' => null,
			'casename' => 'Fifth Wealth-tax Officer Vs. P.D. Store',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '1987-04-10',
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			'favorof' => '',
			'findings' => '',
			'judge' => 'R Sangani, R Garg',
			'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p align="justify">Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p align="justify">2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p align="justify">3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p align="justify">He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p align="justify">5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p align="justify">6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p align="justify">After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p align="justify">In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p align="justify">7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p align="justify">However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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		'judge' => 'R Sangani, R Garg',
		'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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	(int) 0 => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.',
	(int) 1 => '<p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.',
	(int) 2 => '<p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.',
	(int) 3 => '<p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.',
	(int) 4 => '<p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.',
	(int) 5 => '<p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.',
	(int) 6 => '<p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.',
	(int) 7 => '<p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.',
	(int) 8 => '<p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.',
	(int) 9 => '<p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.',
	(int) 10 => '<p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.'
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He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.

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			'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p align="justify">Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p align="justify">2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p align="justify">3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p align="justify">He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p align="justify">5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p align="justify">6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p align="justify">After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p align="justify">In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p align="justify">7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p align="justify">However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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			'pubs' => '(1987)22ITD111(Mum.)',
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$title_for_layout = 'Fifth Wealth Tax Officer Vs P D Store - Citation 62824 - Court Judgment | '
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	'Judgement' => array(
		'id' => '62824',
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		'appellant' => 'Fifth Wealth-tax Officer',
		'authreffered' => null,
		'casename' => 'Fifth Wealth-tax Officer Vs. P.D. Store',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '1987-04-10',
		'deposition' => null,
		'favorof' => '',
		'findings' => '',
		'judge' => 'R Sangani, R Garg',
		'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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		'pubs' => '(1987)22ITD111(Mum.)',
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	(int) 0 => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.',
	(int) 1 => '<p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.',
	(int) 2 => '<p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.',
	(int) 3 => '<p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.',
	(int) 4 => '<p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.',
	(int) 5 => '<p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.',
	(int) 6 => '<p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.',
	(int) 7 => '<p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.',
	(int) 8 => '<p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.',
	(int) 9 => '<p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.',
	(int) 10 => '<p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.'
)
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5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.

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			'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p align="justify">Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p align="justify">2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p align="justify">3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p align="justify">He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p align="justify">5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p align="justify">6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p align="justify">After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p align="justify">In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p align="justify">7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p align="justify">However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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		'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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	(int) 0 => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.',
	(int) 1 => '<p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.',
	(int) 2 => '<p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.',
	(int) 3 => '<p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.',
	(int) 4 => '<p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.',
	(int) 5 => '<p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.',
	(int) 6 => '<p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.',
	(int) 7 => '<p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.',
	(int) 8 => '<p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.',
	(int) 9 => '<p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.',
	(int) 10 => '<p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.'
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6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.

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			'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p align="justify">Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p align="justify">2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p align="justify">3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p align="justify">He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p align="justify">5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p align="justify">6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p align="justify">After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p align="justify">In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p align="justify">7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p align="justify">However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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		'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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	(int) 0 => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.',
	(int) 1 => '<p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.',
	(int) 2 => '<p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.',
	(int) 3 => '<p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.',
	(int) 4 => '<p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.',
	(int) 5 => '<p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.',
	(int) 6 => '<p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.',
	(int) 7 => '<p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.',
	(int) 8 => '<p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.',
	(int) 9 => '<p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.',
	(int) 10 => '<p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.'
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After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.

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	'title_for_layout' => 'Fifth Wealth Tax Officer Vs P D Store - Citation 62824 - Court Judgment | ',
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		'Judgement' => array(
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			'appellant' => 'Fifth Wealth-tax Officer',
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			'casename' => 'Fifth Wealth-tax Officer Vs. P.D. Store',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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			'decidedon' => '1987-04-10',
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			'judge' => 'R Sangani, R Garg',
			'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p align="justify">Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p align="justify">2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p align="justify">3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p align="justify">He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p align="justify">5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p align="justify">6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p align="justify">After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p align="justify">In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p align="justify">7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p align="justify">However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '1987-04-10',
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		'judge' => 'R Sangani, R Garg',
		'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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	(int) 0 => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.',
	(int) 1 => '<p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.',
	(int) 2 => '<p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.',
	(int) 3 => '<p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.',
	(int) 4 => '<p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.',
	(int) 5 => '<p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.',
	(int) 6 => '<p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.',
	(int) 7 => '<p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.',
	(int) 8 => '<p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.',
	(int) 9 => '<p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.',
	(int) 10 => '<p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.'
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In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.

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			'casename' => 'Fifth Wealth-tax Officer Vs. P.D. Store',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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			'judge' => 'R Sangani, R Garg',
			'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p align="justify">Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p align="justify">2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p align="justify">3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p align="justify">He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p align="justify">5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p align="justify">6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p align="justify">After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p align="justify">In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p align="justify">7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p align="justify">However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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		'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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	(int) 0 => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.',
	(int) 1 => '<p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.',
	(int) 2 => '<p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.',
	(int) 3 => '<p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.',
	(int) 4 => '<p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.',
	(int) 5 => '<p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.',
	(int) 6 => '<p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.',
	(int) 7 => '<p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.',
	(int) 8 => '<p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.',
	(int) 9 => '<p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.',
	(int) 10 => '<p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.'
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7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.

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	'title_for_layout' => 'Fifth Wealth Tax Officer Vs P D Store - Citation 62824 - Court Judgment | ',
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			'id' => '62824',
			'acts' => null,
			'appealno' => null,
			'appellant' => 'Fifth Wealth-tax Officer',
			'authreffered' => null,
			'casename' => 'Fifth Wealth-tax Officer Vs. P.D. Store',
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			'caseanalysis' => '',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '1987-04-10',
			'deposition' => null,
			'favorof' => '',
			'findings' => '',
			'judge' => 'R Sangani, R Garg',
			'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p align="justify">Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p align="justify">2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p align="justify">3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p align="justify">He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p align="justify">5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p align="justify">6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p align="justify">After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p align="justify">In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p align="justify">7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p align="justify">However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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		'casename' => 'Fifth Wealth-tax Officer Vs. P.D. Store',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '1987-04-10',
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		'judge' => 'R Sangani, R Garg',
		'judgement' => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.</p><p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.</p><p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.</p><p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.</p><p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.</p><p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.</p><p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.</p><p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.</p><p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.</p><p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.</p><p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.',
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	(int) 0 => ' 1. These six appeals relate to the assessment years 1968-69 to 1973-74 and arise out of the proceedings for imposition of penalty under Section 18(1)(c) of the Wealth-tax Act, 1957. In the following table relevant dates of the original assessment orders, reassessment orders and the penalty orders are given :Assessment Date of Date of Date of Year original reassessment Penalty1968-69 21.1.1969 26.3.1979 31.3.19811969-70 8.10.1969 26.3.1979 31.3.19811970-71 18.1.1972 26.3.1979 31.3.19811971-72 18.1.1972 26.3.1979 31.3.19811972-73 19.1.1973 26.3.1979 31.3.19811973-74 31.10.1973 26.3.1979 31.3.1981 In the original assessment orders, the value of the flat at "El-Cid" Building at 13, Ridge Road, Bombay-6 including garage was taken at Rs. 1,39,000 for the first four assessment years and at Rs. 1,94,550 for the remaining two assessment years on the basis of the valuation made by the registered valuer. Subsequently, reassessment proceedings were initiated on 9.8.1974 under Section 17 of the Wealth-tax Act. Valuation of the said flat including garage was referred to the Departmental Valuation Officer who valued the same at Rs. 1,83,000, 1,88,000, 2 04,000, 2,14,000, 2,34,000 and Rs. 2,51,000 for the said six assessment years respectively. The difference between the valuation made by the registered valuer and that made by the Departmental Valuation Officer was added to the total wealth of the assesses in the reassessment orders. Thereafter, notices under Section 18(2) read with Section 18(1)(c) were issued for all the six years. In penalty orders it is mentioned that no explanation was offered on behalf of the assessee.',
	(int) 1 => '<p>Relying on the Explanation II to Section 18(1), the W.T.O. observed that the amount added in computing the net wealth of the assessee was deemed to represent the value of asset in respect of which the particulars had been concealed for the purpose of Section 18(1)(c) of the W.T. Act. He accordingly imposed the penalties under the said provisions.',
	(int) 2 => '<p>2. The orders imposing penalties are identically worded. Only the figures have been substituted in hand. In each penalty order, it is mentioned that the value of the aforesaid flat was shown at particular figure in the original return and that after reopening the assessment, the value of the said flat has been assessed at higher figures and as such, the difference between the finally assessed figure and the figures shown in the return represented the concealment for the purpose of Section 18(1)(c) of the Act.',
	(int) 3 => '<p>3. The assessee filed appeals before the AAC. Several objections were raised against the imposition of penalties. It was pleaded that the proper show cause notices had not been issued and that the sufficient opportunity had not been given before imposing the penalties. It was further pleaded that the explanation of the assessee given in the letter dated 30.3.1981 had been completely ignored. It was further pleaded that all the facts relating to the fiat and garage were disclosed by the assessee at the time of original assessments and that the valuation shown in the original returns was based on the valuation report of registered valuer. It was further pleaded that the Board Circular No. 4.P(LXXVI-65) dt. 7.6.68 had not been followed and that Explanation to Section 18(1) which came into force with effect from 1.4.1976 had been wrongly applied. Finally it was pleaded that the orders imposing penalties were without jurisdiction because the WTO had not complied with the provisions of Section 18(3) of the W.T. Act which enjoins upon him to refer the matter to the IAC.4. The AAC considered only the last objection raised by the assessee.',
	(int) 4 => '<p>He found that previous approval of the IAC was necessary for imposition of penalty under Section 18(3) of the Act. However, no such approval had been taken and as such, the orders of penalty were without jurisdiction. He, therefore, cancelled the penalty orders. Against the said cancellation of the penalty orders, the Department is now in appeals before us.',
	(int) 5 => '<p>5. Two grounds have been raised on behalf of the Department. The first ground is that non-compliance with the provisions of Section 18(3) was merely a procedural irregularity and that the said irregularity did not invalidate the penalty orders passed by the WTO under Section 18(1)(c) of the Act in view of the provisions of Section 42(c) of the Act. The second ground is that the AAC should have set aside the orders of penalty for rectifying the amount and should not have cancelled the same.',
	(int) 6 => '<p>6. We have heard the parties. The penalty orders indicate that the penalties have been imposed for concealment in the original returns. We have already given the dates of original assessment orders. The dates of the returns were prior to the dates of the original assessment orders. Since the penalty is sought to be levied in respect of the concealment in the original returns, the law as applicable at the time of the filing of the original returns would govern the imposition of penalty. Section 18(3) prior to its amendment with effect from 1-4-1976 by Taxation Laws (Amendment) Act, 1975 was as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the WTO on assessment) in respect of which penalty is imposable under Clause (c) of Sub-section (1) exceeds a sum of twenty-five thousand rupees, the WTO shall refer the case to the IAC who shall for the purpose have all the powers conferred under this section for imposition of penalty.',
	(int) 7 => '<p>After the amendment with effect from 1.4.1976, Sub-section (3) reads as follows :-- (3) Notwithstanding anything contained in Clause (iii) of subsection (1), if, in a case falling under Clause (c) of that Sub-section, the amount (as determined by the Wealth-Tax Officer on assessment) in respect of which penalty is imposable under Clause (c) aforesaid exceeds a sum of twenty-five thousand rupees, the Wealth-tax Officer shall not issue any direction under Sub-section (1) for payment by way of penalty without the previous approval of the Inspecting Assistant Commissioner.',
	(int) 8 => '<p>In these proceedings, Sub-section (3) as it stood prior to 1-4-1976 was applicable because the concealment is alleged to have been made in the original returns which had been filed prior to 1-4-1976. Under the said provisions, order imposing the penalty exceeding twenty-five thousand rupees could have been made only by the IAC. In the present case, all the penalties exceed rupees twenty-five thousand. Consequently, these penalties could not have been imposed by the WTO. The orders imposing penalties in these proceedings were without jurisdiction in view of the provisions as it stood prior to 1-4-1976. Consequently, the penalty orders were liable to be cancelled. There is no infirmity in the orders of the AAC cancelling the penalty orders. This was not the case of curable irregularity as mentioned in the grounds of appeal. This was a case of absence of jurisdiction and as such, only order which the Appellate Authority could have passed was that of cancelling the penalty order.',
	(int) 9 => '<p>7. In Brij Mohan v. CIT [1979] 120 ITR 1, the Supreme Court has held that in respect of penalty imposable for concealment or furnishing inaccurate particulars in the return, law which was applicable was the law operating on the date when the return was filed. In view of this decision of the Supreme Court, the provisions of Sub-section (3) of Section 18 as they stood prior to 1-4-1976 were applicable and we have already held that under those provisions, the WTO could not have imposed the penalty in excess of twenty-five thousand rupees and as such, the orders imposing the penalties were without jurisdiction.',
	(int) 10 => '<p>However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.'
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However, for the sake of arguments, we shall assume as was contended on behalf of the department that the provisions of Section 18(3) as they stood after 1-4-1976 would be applicable. We have already quoted the provisions of Section 18(3) as they now stand after the amendment on 1-4-1976]. Under those provisions an order imposing penalty exceeding twenty-five thousand rupees cannot be passed by the WTO without the previous approval of the IAC. In the present cases, it is an admitted fact that the previous approval of the IAC has not been obtained before passing the penalty orders. What has happened is that the Commissioner of Wealth-tax has granted approval for imposing the penalty for the assessment years 1970-71, 1971-72 and 1973-74. For other three years, namely, 1968-69, 1969-70 and 1972-73, no approval has been granted even by the Commissioner of Wealth-tax. Consequently, as far as the penalties relating to the assessment years 1968-69, 1969-70 and 1972-73 are concerned, they are liable to be quashed and the orders of the AAC cancelling the penalties for those assessment years are liable to be confirmed. As regards other three assessment years, namely, 1970-71, 1971-72 and 1973-74, previous approval is that of Commissioner and not that of Inspecting Assistant Commissioner. It is true that the Commissioner of Wealth-tax is higher officer vis-a-vis the Inspecting Assistant Commissioner. However, we are concerned with the question whether the conditions imposed for exercising jurisdiction by the statute have been fulfilled. The statute, namely, Sub-section (3) of Section 18 as it stands after the amendment on 1-4-1976 requires previous approval of IAC and not of Commissioner of Wealth-tax. The IAC is the statutory authority whose approval would confer jurisdiction on the WTO. Approval of any authority even though that authority is higher in status to that of the statutory authority would not confer jurisdiction on the WTO when the statutory provision does not require the previous approval of the Commissioner but specifically requires the previous approval of the IAC. When statute confers jurisdiction on specified authority for grant of previous approval, that authority alone would have jurisdiction to grant previous approval. The duty to grant previous approval cannot be abdicated by that authority in favour of any other authority although the other authority was superior in rank. Consequently, even if we hold that the Commissioner of Wealth-tax had granted previous approval for the assessment years 1970-71, 1971-72 and 1973-74 and further that the provisions of Section 18(3) as they stood after 1-4-1976 were applicable, the orders of the WTO would still be without jurisdiction because the previous approval of the IAC as required by Sub-section (3) of Section 18 had not been obtained. Looked from any angle, the orders imposing penalties by the WTO in the present cases, are without jurisdiction and as such, were rightly cancelled by the AAC. Since other grounds which had been raised by the assessee before the AAC were not considered by the AAC, we do not express any opinion on those grounds. We confirm the orders of the AAC cancelling the penalties.

Court	Income Tax Appellate Tribunal ITAT Mumbai
Decided On	Apr-10-1987
Judge	R Sangani, R Garg
Reported in	(1987)22ITD111(Mum.)
Appellant	Fifth Wealth-tax Officer
Respondent	P.D. Store

Fifth Wealth-tax Officer Vs. P.D. Store - Court Judgment