COMMISSIONER OF WEALTH TAX VS SOMA WANTI SETHI
2001 P T D 1944
[246 I T R 341]
[Delhi High Court (India)]
Before Arijit Pasayat, C. J. and D. K. Jain, J
COMMISSIONER OF WEALTH TAX
Versus
Mrs. R.B. PATEL
Wealth Tax References Nos.64 and 65 of 1978, decided on 05/07/2000.
Wealth tax‑‑‑
‑‑‑‑Rectification of mistakes ‑‑‑Exemption ‑‑‑Jewellery‑‑‑Wealth tax assessment completed excluding value of jewellery as falling under exemption ‑‑‑Retrospective amendment to S.5(1)(viii) by Finance (No.2) Act, .1971, making jewellery liable to wealth tax ‑‑‑Wealth Tax Officer entitled to rectify concluded assessment by U sorting to S.35 of Act‑‑‑Indian Wealth Tax Act, 1957, Ss.5(1)(viii) & 35 ‑‑‑Indian Finance (No.2) Act; 1971.
Wealth tax assessments for the assessment years 1968‑69 and 1969‑70 were originally completed exempting the value of jewellery from the assessee's net wealth. Subsequent to the amendment made to section 5(1)(viii), of the Wealth Tax Act, 1957, by the Finance (No.2) Act, 1971, with retrospective effect from April 1, 1963, making jewellery liable to wealth tax; the Wealth Tax Officer invoking section 35 of the Act sought to rectify the assessments by including the value of jewellery in the net wealth of the assessee. The Tribunal held that the question was a debatable one as to whether the amending provision applied to a concluded assessment against which no further proceedings were pending on the date of the enactment of the amending provision and, therefore, section 35 had no application. On a reference‑
Held,Held, that the Wealth Tax Officer had powers to rectify the assessment by resorting to powers under section 35 of the Act.
J. M. Bhatia, A. A. C. of W. T. v. J. M. Shah. (1985) 156 ITR 474 (SC) fol
Sanjiv Khanna with Ajay Jha for the Commissioner
Nemo for the Assessee
JUDGMENT
ARIJIT PASAYAT, C.J.‑‑‑These two reference applications invoke identical questions, pertaining to the assessment years 1968‑69 and 1969‑70, which have been referred under section 27(1) of the Wealth Tax Act, 1957 (for short "the Act"), by the Income‑tax Appellate Tribunal Delhi Bench‑E (for short "the Tribunal"), for the opinion of this Court: ,
"Whether, on the facts and in the circumst8nces of the case, the provisions of section 35 of the Wealth Tax Act can be invoked to rectify the original assessment and to include the value of the jewellery, thus, giving effect to the amendments effected in section 5(l)(viii) of the Wealth Tax Act, 1957 by the Finance (No.2) Act of 1971?"
Since the answer to the question would depend upon the scope and ambit of section 35 of the Act, a detailed reference to the factual position is unnecessary. In brief, it is as follows: The assessments were originally completed for the two assessment years. When such assessments were taken up, the assessee claimed exemption in respect of jewellery valued at Rs.2,90,025. The Assessing Officer accepted the assessee's claim and the value of jewellery was nor included in the net wealth. Subsequently, by the Finance (No.2) Act, 1971, an amendment was made to section 5(l)(viii) making jewellery liable to wealth tax. Two Explanations were added to this amended section 5(I)(viii), enlarging the scope of interpretation of .the word "jewellery". The Explanations were made operative with effect from April 1, 1972. Referring to the amendment, the Wealth Tax Officer was of the view that non‑inclusion of value of jewellery in the original assessments was a mistake apparent from the record. Proceedings were initiated tinder section 35 of the Act and the orders were passed including the value of jewellery, in the net wealth of the assessee. The appeals were tiled before the Appellate Assistant Commissioner (for short "the A.A.C."). It was contended by the assessee before him that there is no scope for bringing in application of section 35 of the Act. The assessee's plea was accepted by the Appellate Assistant Commissioner. In appeal by the Revenue, the order of the Appellate Assistant Commissioner was sustained by the Tribunal. It was held that the question was a debatable one as to whether the amending provisions applied to a concluded assessment against which no further proceedings are pending on the date of the enactment of the amending provision and, therefore, section 35 had no application to the case. On being moved for reference, the prayer was accepted by the Tribunal.
Heard learned counsel for the Revenue. There is no appearance on behalf of the assessee in spite of service notice.
The point in issue has been directly dealt with and adjudicated upon by the apex Court in J.M. Bhatia, A.A.C. of W.T. v. J.M. Shah (1985) 156 ITR 474, wherein it was held that section 35 had application. Following the ratio of the said decision, we answer the question in the affirmative, in favour of the Revenue and against the assessee.
The reference applications are disposed of.
M.B.A./509/FCOrder accordingly.