INCOME TAX
INSTRUCTION NO. 1907/1993
Dated: June 17, 1993
The Jammu & Kashmir High Court in its judgment dated 19.4.83 had declared extension of the Wealth-tax Act to the State of Jammu & Kashmir as ultra-vires. However, the Supreme Court in its judgment dated 4.2.93 has reversed this decision of the High Court and has upheld the validity of extension of the Wealth Tax Act to the State of Jammu & Kashmir.
2. After the judgment of the Jammu & Kashmir High Court, some assessees, though assessable to wealth tax, did not file their returns of Wealth and no assessments could be made in their cases. In some other cases, where assessments were completed, demands raised could not be pressed for recovery. After receipt of the judgment of the Supreme Court, assessments in all cases liable to wealth tax (and assessed in the state of Jammu & Kashmir) can now be made and demands can be realised as per provisions in the law.
3. Considering the fact that recovery of demand relating to a number of assessment years at one time is likely to create genuine hardship to assessee in the state of Jammu & Kashmir, the Board is of the view that realisation of taxes may be made in a phased manner or through grant of suitable instalments. Requests for granting instalments for recovery of demand may be liberally considered on this point. In cases where demands are not substantial and the present whereabouts of the assessee is not available, demands can also be considered for write-off by following the existing procedure liberally.
4. The Board has also taken following further decisions:
(i) In cases where interest under section 31(2) of the Wealth tax Act has been levied/has become chargeable for non payment of outstanding demand, such interest shall be waived by invoking provisions of section 31(2A), However such waiver should be restricted to the period commencing from 19.4.83 (date of the High Court judgment) to 4.2.93 (date of the Supreme court judgment).
(ii) Where for any default in payment of self assessment tax after 19.4.83, penalty u/s 15B(3) of the Wealth-tax Act (unto Assessment Year 1988-89) or u/s 221 of the Income-tax Act read with section 32 of the Wealth tax Act has already been imposed for default in payment of self assessment tax, it shall be cancelled by the Commissioner in exercise of powers given by section 25(1) of the Wealth-tax Act. The assessees may be suitably advised to file applications and the Commissioners will condone the delay, if any, in filing of such applications.
(iii) Penalties already imposed u/s 18 for any default relating to the period from 19.4.83 to 4.2.93 should be cancelled, reduced by exercise of powers given by section 25(1) of the Wealth tax Act by following the procedure detailed at (ii) above.
(iv) There may be some cases where proceedings for imposition of penalties under section 18 of the Wealth tax Act or section 221 of the Income tax Act read with section 32 of the Wealth tax Act have already been initiated and are pending. No such penalty shall be imposed for any period of default commencing from 19.4.83 and ending on 4.2.93.
5. The Board has separately passed an order dated 17th June, 1993 u/s 10(2)(a) of the Wealth-tax Act waiving interest charged/chargeable u/s 17B and penalties imposable u/s 15B(3), 18 and 32 of the Wealth tax Act read with section 221 of the Income tax Act.
6. The above instruction of the Board shall apply to all assessees in the State of Jammu & Kashmir and may kindly be brought to the notice of all concerned officers of your region.
7. Hindi version follows separately.