1. DR. B.P. SARAF, C.J.---By this reference under section 27(1) of the Wealth Tax Act, 1957, ("the Act")
2. (erroneously numbered as income-tax reference), the Income-tax Appellate Tribunal, Amritsar Bench, Amristar ("the Tribunal"), has referred the following three questions of law to this Court for opinion at the instance of the Revenue: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in considering in the course of and for the purposes of disposing of an appeal with regard to levy of penalty for default under section 18(1)(a) of the Wealth Tax Act, 1957, a challenge to the validity of the assessm ent order which was in fact final and conclusive?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the assessm ent for the relevant year made in the assessee's case was invalid and non est in the eyes of law on the authority of the decision of the Jammu and Kashmir High Court in the case of. S. Mubarik Shah Naqshbandi v.
3. C1T (1977) 110 ITR 217 even though the tax payable by the assessee was duly determined in a separate sheet, namely, assessm ent form, which had been prepared and signed by the Wealth Tax Officer simultaneously with the assessment order and which had been sent to the assessee alongwith the assessm ent orders and the demand notice?
(3) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that validity of levy of penally is linked with and depends upon the validity of the assessm ent order for the concerned year even though the assessment order for may not have been cancelled on this ground and that it is open to an assessee to challenge the levy of penalty on the grounds of the validity of the assessment?"
4. None appears for the assessee. Mr. Anil Bhan, learned counsel, appears for the Revenue.
5. We have heard learned counsel for the Revenue and perused the order of the Tribunal. The real controversy in this case, which pertains to the validity of the assessment order, now stands concluded by the ratio of the decision of the Supreme Court in Kalyankumar Ray v. CIT (1991) 191 ITR 634 and the decision of this Court rendered on June 26, 2000 in Income-tax Reference No.7 of 1979 (CIT v. Alkeensons Agencies (2000) 246 ITR 125 (J&K)), wherein, in the context of an identical dispute under the Income Tax Act, 1961, it has been held that the statute does not require that both the computations, that is, of the total income as well as of the sum payable should be done on the same sheet of paper, viz., the assessment order; it is sufficient compliance with requirements of section 143(3) of Income-tax Act, 1961, if the tax payable is also computed and the computation is approved by the Income-tax Officer, either immediately or some time later.
6. The position is the same under the Wealth Tax Act, 1957 ("the Act"). Like section 143(3) of the Income-tax Act, section 16(3) of the Act also provides that the Assessing Officer shall, by order in writing, assess the net wealth of the assessee and determine the tax payable on the basis of such assessm ent. As held by the Supreme Court and this Court in the cases cited above, this requirement does not mean that both the calculations, that is, the calculation of the net wealth as well as of the tax payable, should be done in the body of the assessment order itself. It will be sufficient compliance with the requirement of section 16(3) of the Act, if the tax payable is also calculated and the Assessing Officer approves the calculation by putting his signature thereon. It is immaterial whether the calculation is made on the assessment order or on a separate sheet of paper. Once both the sheets, that is, the assessment order sheet and the tax calculation sheet, are signed by the Assessing Officer, the assessm ent process will be complete in accordance with the requirements of section 16(3) of the Act.
7. In the instant case, there is no dispute about the fact that the tax payable had been duly determined in a separate sheet of paper, namely, assessment order form, which was prepared and signed by the Wealth Tax Officer simultaneously with the assessment order and sent to the assessee alongwith the assessm ent order and the demand notice. That being so, the ratio of the decision of the Supreme Court in Kalyankumar Ray v. CIT (1991) 191 ITR 634 and of this Court in CIT v.
8. Alkeensons Agencies (2000) 246 ITR 125 is fully applicable. The assessment order is a valid and legal order. There is no infirmity in the same. The decision of this Court in S. Mubarik Shah Naqashbandi v. CIT (1977) 110 ITR 217 has nd application to the facts and circumstances of this case., The Tribunal was not justified in applying 'the ratio of the above decision of this Court and holding that the assessm ent in question was non est in the eye of law. Question No.2 is, therefore, answered in the negative, that is, in the favour of the Revenue and against the assessee.
9. In view of the above answer to Question No.2, the other two questions have become academic.
10. Otherwise also, the answer to these questions is obvious. The law is well-settled that penalty proceedings and assessm ent proceedings are two separate proceedings. An appeal is provided under section 23 of the Act both against the order of assessment and the order of penalty. Any person objecting to any penalty imposed by the Assessing Officer under section 18 may appeal to the Appellate Assistant Commissioner under clause (d) of section 23(1). Separate provisions have been made in clauses. (a), (b) and (c) of section 23(1) for appeal by a person aggrieved by an order of assessm ent. Any person objecting to the amount of net wealth determined under the Act or objecting to the amount of wealth tax determined as payable by him under the Act or denying his liability to be assessed under the Act may appeal to the Appellate Assistant Commissioner under clauses (a), (b) and (c) of section 23(1) of the Act, respectively. If the order of the assessm ent is not challenged, it becomes final and cannot be challenged in an appeal under clause (d) of section 23(1) of the Act against an order of penalty. The challenge in such appeal is confined to the imposition of penalty. The scope and ambit of the appeal is restricted to the order of penalty. The validity of the assessment order, which has attained finality cannot be challenged in such an appeal. The appellate authority cannot entertain any challenge to the validity of the assessm ent order in an appeal against the order of penalty. In that view of the matter, we are of the clear opinion that the Tribunal was not justified in considering the challenge to the validity of the assessm ent order, which had become final and conclusive. In the course of hearing of an appeal against the order of penalty, and declaring the same to be illegal and invalid. Questions Nos.1 and 3 are, therefore, answered in the negative that is, in favour of the Revenue and against the assessee.
11. This reference is disposed of, accordingly, with no order as to Costs. .