26[Penalty for failure to furnish returns, to
comply with notices and concealment of assets, etc.
2718. (1) If the 28[Assessing Officer], 29[Deputy
Commissioner (Appeals)], 30[Commissioner (Appeals),] 31[Chief
Commissioner or Commissioner] or Appellate Tribunal in the course of any
proceedings under this Act is satisfied that any person—
(a) 32[***]
(b) has 33[***]
failed to comply with a notice under sub-section (2) or sub-section (4) of
section 16 ; or
(c) has
concealed the particulars of any assets or furnished inaccurate particulars of
any assets or debts,
he or it may, by order in writing, direct that such person shall pay by
way of penalty—
(i) 34[***]
35[(ii) in the cases referred to in clause (b),
in addition to the amount of wealth-tax payable by him, a sum which shall not
be less than one thousand rupees but which may extend to twenty-five thousand
rupees for each such failure ;]
36[(iii) in the cases referred to in clause (c),
in addition to any wealth-tax payable by him, a sum which shall not be less
than, but which shall not exceed five times, the amount of tax sought to be
evaded by reason of the concealment of particulars of any assets or the
furnishing of inaccurate particulars in respect of any assets or debts :
37[Provided that in the cases referred to
in clause (b), no penalty shall be imposable if the person proves that
there was a reasonable cause for the failure referred to in that clause.]
Explanation 1.—For the
purposes of clause (iii) of this sub-section, the expression “the amount
of tax sought to be evaded”—
(a) in a case to
which Explanation 3 applies, means the tax on the net wealth assessed ;
(b) in any other
case, means the difference between the tax on the net wealth assessed and the
tax that would have been chargeable had the net wealth assessed been reduced by
the amount which represents the value of any assets in respect of which
particulars have been concealed or inaccurate particulars have been furnished
and of any debts in respect of which inaccurate particulars have been
furnished.
Explanation 2.—Where
in respect of any facts material to the computation of the net wealth of any
person under this Act,—
(A) such person
fails to offer an explanation or offers an explanation which is found by the 38[Assessing
Officer] or the 39[Deputy Commissioner
(Appeals)] 40[or the Commissioner
(Appeals)] 41[or the Commissioner]
to be false, or
(B) such person
offers an explanation which he is not able to substantiate 42[and
fails to prove that such explanation is bona fide and that all the facts
relating to the same and material to the computation of his net wealth have
been disclosed by him],
then, the amount added or disallowed in computing the net wealth of such
person as a result thereof shall, for the purposes of clause (c) of this
sub-section, be deemed to represent the value of the assets in respect of which
particulars have been concealed.
43[***]]
44[Explanation 3.—Where any person 45[***]
fails, without reasonable cause, to furnish within the period specified in
sub-section (1) of section 17A, a return of his net wealth which he is required
to furnish under section 14 in respect of any assessment year commencing on or
after the 1st day of April, 1989, and until the expiry of the period aforesaid,
no notice has been issued to him under clause (i) of sub-section (4) of
section 16 or sub-section (1) of section 17 and the Assessing Officer or the
Deputy Commissioner (Appeals) or the Commissioner (Appeals) is satisfied that
in respect of such assessment year such person has assessable net wealth, then,
such person shall, for the purposes of clause (c) of this sub-section,
be deemed to have concealed the particulars of his assets or furnished
inaccurate particulars of any assets or debts in respect of such assessment
year, notwithstanding that such person furnishes a return of his net wealth at
any time after the expiry of either of the periods aforesaid applicable to him
in pursuance of a notice under section 17.]
Explanation 4.—Where
the value of any asset returned by any person is less than seventy per cent of
the value of such asset as determined in an assessment under section 16 or
section 17, such person shall be deemed to have furnished inaccurate particulars
of such asset within the meaning of clause (c) of this sub-section,
unless he proves that the value of the asset as returned by him is the correct
value.]
46[Explanation 5.—Where in the course of
a search under section 37A, the assessee is found to be the owner of any money,
bullion, jewellery or other valuable article or thing (hereafter in this Explanation
referred to as assets) and the assessee claims that such assets represent or
form part of his net wealth,—
(a) on any
valuation date falling before the date of the search, but the return in respect
of the net wealth on such date has not been furnished before the date of the
search or, where such return has been furnished before the said date, such
assets have not been declared in such return ; or
(b) on any
valuation date falling on or after the date of the search,
then, notwithstanding that such assets are
declared by him in any return of net wealth furnished on or after the date of
the search, he shall, for the purposes of imposition of a penalty under clause
(c) of sub-section (1) of this section, be deemed to have concealed the
particulars of such assets or furnished inaccurate particulars of such assets,
47[unless—
(1) such assets
are recorded,—
(i) in a case falling under clause (a), before the date of the
search ; and
(ii) in a case
falling under clause (b), on or before such date,
in the books of account, if any, maintained by him or
such assets are otherwise disclosed to the 48[Chief Commissioner or
Commissioner] before the said date ; or
(2) he, in the
course of the search, makes a statement under sub-section (4) of section 37A
that any money, bullion, jewellery or other valuable article or thing found in
his possession or under his control, forms part of his net wealth which has
not been disclosed so far in his return of net wealth to be furnished before
the expiry of the time specified in sub-section (1) of section 14, and also
specifies in the statement the manner in which such net wealth has been
acquired and pays the tax, together with interest, if any, in respect of such
net wealth].]
49[Explanation 6.—Where any adjustment is
made in the wealth declared in the return under the proviso to clause (a)
of sub-section (1) of section 16 and additional wealth-tax charged under that
section, the provisions of this sub-section shall not apply in relation to the
adjustments so made.]
50[(1A) Where any
amount is added or disallowed in computing the net wealth of an assessee in any
order of assessment or reassessment and the said order contains a direction
for initiation of penalty proceedings under clause (c) of sub-section (1), such an order of
assessment or reassessment shall be deemed to constitute satisfaction of the
Assessing Officer for initiation of the penalty proceedings under the said
clause (c).]
(2) No order shall be made under sub-section (1) unless the person
concerned has been given a reasonable opportunity of being heard.
(2A) and (2B) 51[***]
52[(3) No order imposing a penalty under
sub-section (1) shall be made,—
(i) by the
Income-tax Officer, where the penalty exceeds ten thousand rupees ;
(ii) by the
Assistant Commissioner 53[or Deputy
Commissioner], where the penalty exceeds twenty thousand rupees,
except with the prior approval of the 54[Joint] Commissioner.]
(3A) 55[***]
(4) A 56[Deputy
Commissioner (Appeals)], 57[a Commissioner (Appeals),] a 58[Chief
Commissioner or Commissioner] or the Appellate Tribunal on making an order
under this section imposing a penalty, shall forthwith send a copy of the same
to the 59[Assessing
Officer.]
60[(5) No order imposing a penalty under this
section shall be passed—
(i) in a case
where the assessment to which the proceedings for imposition of penalty relate
is the subject-matter of an appeal to the Deputy Commissioner (Appeals) or the
Commissioner (Appeals) under section 23 or an appeal to the Appellate Tribunal
under sub-section (2) of section 24, after the expiry of the financial year in
which the proceedings, in the course of which action for the imposition of
penalty has been initiated, are completed, or six months from the end of the
month in which the order of the Deputy Commissioner (Appeals) or the
Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is
received by the Chief Commissioner or Commissioner, whichever is later ;
(ii) in a case
where the relevant assessment is the subject-matter of revision under
sub-section (2) of section 25, after the expiry of six months from the end of
the month in which such order of revision is passed ;
(iii) in any
other case, after the expiry of the financial year in which the proceedings,
in the course of which action for the imposition of penalty has been initiated,
are completed, or six months from the end of the month in which action for
imposition of penalty is initiated, whichever period expires later.
Explanation.—In
computing the period of limitation for the purposes of this section,—
(i) any period
during which the immunity granted under section 22H remained in force ;
(ii) the time
taken in giving an opportunity to the assessee to be reheard under the proviso
to section 39 ; and
(iii) any period
during which a proceeding under this section for the levy of penalty is stayed
by an order or injunction of any court,
shall be excluded.
(6) The provisions of this section as they stood immediately before
their amendment by the Direct Tax Laws (Amendment) Act, 1989 shall apply to and
in relation to any assessment for the assessment year commencing on the 1st day
of April, 1988, or any earlier assessment year and references in this section
to the other provisions of this Act shall be construed as references to those
provisions as for the time being in force and applicable to the relevant
assessment year.]