Wealth Tax Act (XV of 1963)‑‑‑

‑‑‑‑S. 35‑‑‑Rectification of mistake‑‑‑Order passed by the Inspecting Additional Commissioner under S. 17B of the Wealth Tax Act, 1963 was rectified by the Deputy Commissioner of Wealth Tax under S.35 of the Wealth Tax Act, 1963‑‑‑Validity‑‑‑Only that Authority could rectify an order who had passed it originally and rectification could be made only in respect of a mistake which was apparent from the record‑‑‑If the contention of the Revenue that Inspecting Additional Commissioner's order passed under S.17B of the Wealth Tax Act, 1963 had rightly been rectified by the Deputy Commissioner of Wealth Tax under S.35 of the Wealth Tax Act, 1963 was accepted, then it would not only be against the spirit of law and principle of functional jurisdiction assigned to various Authorities but it would also lead to anarchy and in that case it may happen that the Assessing Officers may start rectifying the orders passed by the Appellate Authorities like Commissioner and Appellate Tribunal which the law did not permit‑‑‑Rectification order passed by the Deputy Commissioner of Wealth Tax under S.35 of the Wealth Tax Act, 1963 was rightly cancelled by the First Appellate Authority which was maintained by the Appellate Tribunal‑‑‑Appeal of the Department was dismissed.

Bashir Ahmad Shad, D.R. for Appellant.

Shahid Pervaiz Jami for Respondent.

Date of hearing: 8^th March, 2003.

ORDER

MUHAMMAD SHARIF CHAUDHRY (ACCOUNTANT (MEMBER).‑‑‑These two appeals have been filed at the instance of revenue for the years 1995‑96 and 1996‑97 against appellate order, dated 14‑12‑2001 passed by Commissioner Income Tax Appeal Zone‑II, Lahore under section 23 of the Wealth Tax Act, 1963. It has been contended in the grounds of appeal that the learned Commissioner had no justification to cancel the order passed by the DCWT on the allegations of being illegal and without jurisdiction.

2. Appellant's DR and assessee's AR have been heard. Available records have been perused.

3. Brief facts of the case are that the assessee is a private limited company. Orders under section 17B of the Wealth Tax Act, 1963 for the years 1995‑96 and 1996‑97 were passed by the IAC of Income tax/Wealth tax Company Zone‑II, Lahore on 24‑8‑1998 at net wealth of Rs.3,79,40,041 and Rs.4,46,76,508 respectively. There was some mistakes in these orders on the issue of basic exemption and computation of liabilities. The assessee moved applications for rectification of these mistakes to the said IAC under section 35, of the Wealth Tax Act. Rectification orders were, however, passed by the DCWT under section 35 of the Wealth Tax Act for the years under consideration on assessee's application of rather than by the IAC. In appeals filed by the assessee against this action of the DCWT the learned Commissioner has cancelled the rectification orders passed by the DCWT being illegal and out of jurisdiction. It is against this decision of the learned First Appellate Authority that the department has now come up in appeals before us.

4. Having gone through the rectification orders passed by the DCWT under section 35 of the Wealth Tax Act and having gone through the impugned appellate orders passed by Commissioner under section 23 of the Wealth Tax Act and also having considered the arguments given at the bar we are of the view that the action of the learned Commissioner in the instant case is absolutely justified which calls for no interference. We do not subscribe to the view of the Revenue that orders passed by IAC under section 17B can be rectified by DCWT under section 35 of the Wealth Tax Act. This view is obviously against the scheme of wealth tax law. It is an established principle of law that orders passed by an authority under any provision of Wealth Tax Act can be rectified by the same authority under section 35 and not by any other authority. Section 35 of the Wealth Tax Act which deals with rectification of mistakes read as under:‑‑

"35. Rectification of mistakes.‑‑‑At any time within four years from the date of any order passed by him, or it, the Commissioner, the Wealth Tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal may, on his, or its, own motion rectify any mistake apparent from the record and shall, within alike period, rectify any such mistake which has been brought to the notice of Commissioner, the Wealth Tax Officer, the Appellate Assistant Commissioner or the Appellate Tribunal, as the case may be, by an assessee:

Provided that no such rectification shall be made which has the effect of enhancing the assessment unless the assessee has been given a reasonable opportunity of being heard .in the matter. "

5. From a plain reading of the above mentioned section it is crystal clear that only that authority can rectify an order who has passed it originally and rectification can be made only in respect of a mistake which is apparent from the record. It is contention of Revenue that IAC's order passed under section 17B has rightly been rectified by DCWT under section 35 is accepted, then it would not only be against the spirit of law and principle of functional jurisdiction assigned to various authorities but it would also lead to anarchy. In that case it may happen that the Assessing Officers may start rectifying the orders passed by‑‑Appellate Authority like Commissioner and ITAT. It would, of course, be an interesting rather amounting situation but the law does not permit the situation of such amusements.

6. In view of the foregoing discussion we feel no hesitation to hold that the rectification orders passed by DCWT under section 35 in the instant case have rightly been cancelled by the learned Commissioner. In the interest of justice, therefore, the impugned appellate order is maintained and appeals filed by Revenue are dismissed.

C.M.A./854/Tax (Trib.)Appeals dismissed.