Case Law Details
T.S.Kalyana Chakravarthy Vs Dy.Director of Wealth Tax (ITAT Visakhapatnam)
In para No.No.3.1 of the penalty order the Ld CWT(A) stated that the penalty was initiated for furnishing of inaccurate particulars of net wealth. Though from the penalty order it revealed that the CWT(A) has initiated the penalty u/s 18(1)(c) for furnishing of inaccurate particulars of net wealth, but both the CWT(A) order as well as the show cause notice does not indicate for which offence the penalty was initiated, whether for inaccurate particulars or concealment of income. Though the CWT(A) has issued the show cause notice stating that the assessee was required to explain the reasons for furnishing inaccurate particulars, concealment of wealth, it was not clearly made known for which offence the assessee is required to submit his explanation. The Ld.CWT(A) should have struck off the irrelevant column and made known the assessee by mentioning for which reason the penalty was initiated. Penalty u/s 18(1)(c) of WT Act are parimateria to Income Tax Act 271(1)(c). As per settled case laws non striking the irrelevant column in the notice issued u/s 18(1)(c) renders the notice invalid and consequent penalty required to be cancelled.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
These appeals are filed by the assessee against the orders of the Commissioner of Wealth Tax (Appeals)-10, [CWT(A)] Hyderabad vide dated 31.03.2017 related to the penalty imposed u/s 18(1)(c) of Wealth Tax Act. Since the facts are identical and the issue involved is common in these appeals, they are clubbed, heard together and disposed of by this common order for the sake of convenience. The facts are extracted from WTA 23/Viz/2017 for the A.Y.2008-09.
2. In these appeals, wealth tax assessments were completed on net wealth of Rs.3,49,73,040/-. The assessee has taken loan of Rs.5,09,00,000/- for purchase of the asset from his wife and claimed the deduction from the value of the asset. Since both the assessee and the creditor are not residents, the AO relied on Circular No. 392[F.No.321/78/75-WT], dated 24.08.1984 and recomputed the net wealth rejecting the assessee’s claim for deduction of loan taken from his wife amounting to Rs.5,09,00,000/-. The assessee went on appeal before the CWT(A) and the Ld.CWT(A), confirmed the addition made by the Assessing Officer(AO)and enhanced the net wealth by including the consideration paid for stamp duty, registration charges to the extent of Rs.1,65,50,915/-, thereby the value of the asset was determined at Rs.19,07,69,135/- against the value admitted by the assessee at Rs.13,06,80,000/- and the assessee’s share of 1/3 enhancement worked out to Rs.2,00,29,711/-. The enhancement proposal was agreed by the Ld.AR. The Ld.CWT(A) initiated penalty u/s 18(1)(c) of Wealth Tax Act, issued show cause notice and imposed the penalty of Rs.2,05,000/- u/s 18(1)(c) of Wealth Tax Act.
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