M.A. No.662/LB of 2003, decided on 14th November, 2003. VS M.A. No.662/LB of 2003, decided on 14th November, 2003., 2004 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 896 (2003)

(a) Wealth Tax Act (XV of 1963)‑‑‑

‑‑‑‑S. 2(1)(16)‑‑‑Net wealth‑‑‑Owner‑‑‑When the assessee has himself asserted "ownership" of a plot of land in the Return of net wealth filed by him and when the law protects the rights of the assessee who holds such property without fear of challenge from the seller or anyone acting under him, there cannot be any doubt as to the assessee being "owner" of such property "under wealth tax law".

(b) Wealth Tax Act (XV of 1963)‑‑‑

‑‑‑‑Ss. 35 & 2(1)(16)‑‑‑Rectification of mistake‑‑‑Net wealth‑‑‑Owner‑‑ Purchase of plot‑‑‑Execution of agreement to sell‑‑‑Full payment was made‑‑‑No mutation of such plot in the name of assessee‑‑‑Assessee declared such plot in his wealth tax return‑‑‑Appellate Tribunal found that assessee was "owner" of such plot and value of such plot shall be included in the net wealth of the assessee according to rate schedule notified by the District Collector‑‑‑Miscellaneous application for rectification‑‑ Validity‑Plot of land was specifically declared by the assessee in his Wealth Tax Return as his asset‑‑‑Specific value had been attached to the said assets by the assessee in the return and the asset had been included in the assessee's net wealth‑‑‑Assessee was admittedly in possession of plot and had made full payment to the seller and formal agreement to sell had been executed and registered, the assessee was indeed the "owner" of the plot "under wealth tax law" as the term "owner" had a' broader connotation than that ordinarily attached‑‑ Application was found to be devoid of any merit and was rejected by the Appellate Tribunal.

PLD 1964'SC 456; 1 ITC 140 and W.T.A. No. 1123/LB of 2000 rel.

Shafqat Mehmood Chohan for Applicant.

Dr. Abdul Sattar Abbasi, D.R. for Respondent.

Date of hearing; 11th November, 2003.

ORDER

MUHAMMAD MUNIR QURESHI (ACCOUNTANT MEMBER).‑‑‑This miscellaneous application by an individual is for recall of Tribunals' order bearing W.T.A. No. 1276/LB of 2002 (Assessment Year 2000‑2001), dated 15‑6‑2003.

2. As per applicant, the judgment as passed by the Tribunal is in conflict with the judgment allegedly announced in Court on 13‑8‑2003 when, as per affidavit filed by the assessee, the Tribunal had, statedly rejected the Departmental appeal. Further, according to the applicant, the afore-cited order of the Tribunal is erroneous insofar as the facts of applicant's case have not been properly appreciated and reliance has wrongly been placed on Supreme Court of Pakistan judgment cited as PLD 1964 SC 456 and the applicant has been wrongly cited as "co -owner" in plot measuring 34 Kanals (680 Marlas) at Zafar Ali Road, Sialkot Cantt., in which assessee's share had been determined at 85 Marlas and has been appraised for purposes of levy of wealth tax by the Assessing Officer at Rs.1,27,000 per Marla thus aggregating total value in assessee's hands at Rs.10,795,000.

3. Briefly stated, the relevant facts in this case are that the assessee filed return of net wealth for the assessment year 2000‑2001 in which assessee's share in the plot of land referred to supra has been duly declared at Rs.2,50,000. On scrutiny of the return, the Assessing Officer found the declared value to be understated and proceeded to appraise the plot as per rate schedule notified by the District Collector, Sialkot (Sr. No. 73 of the rate list) at Rs.1,27,000 per Marla and resultantly, the total value in assessee's case for 85 Marlas came to Rs. 10,795.000. The treatment as accorded by the Assessing Officer was contested by the assessee before the CWT(A) who held that there being no mutation of the cited property in assessee's name, therefore, the said plot of land was not to be included in the "net wealth" of the assessee as defined in section 2(1) (16) of the Wealth Tax Act, 1963 (since repealed).

Resultantly, the order of the Assessing Officer was held to be not sustainable on this issue and vacated.

4. The Department filed appeal before the Tribunal against the order of the CWT(A) contesting the findings as recorded by the First Appellate Authority with regard to the cited property. The Tribunal vide W.T.A. No. 1276/LB of 2002 (Assessment Year 2000‑2001), dated 15‑8‑2003 disposed off the Departmental appeal and after examination of various pertinent aspects pertaining to valuation of the cited property held that the assessee was indeed the "owner" of said property and the order of the CWT(A) Was accordingly vacated and Assessing Officer's order reinstated. In, reaching the conclusion that the assessee is "owner" of the said plot, the Tribunal has taken cognizance of the all important fact that the assesses has himself cited the said plot In his personal wealth tax return as his immovable property and has Included the same In his net wealth. Furthermore the Tribunal has noted that the assesses having made full payment to the seller and an agreement td sell having been executed and duly registered with the Sub‑Registrar, Sialkot, the assessee's rights in the said property were fully protected and reference has been made in this context to Hon'ble Supreme Court of Pakistan judgment as recorded in the case of Mst. Ghulam Sakeena v. Umer Baksh and another Civil Appeal No.66 of 1963 decided on 2nd April, 1964 and reported as PLD 1964 SC 456. Also, the Tribunal has referred to judgment cited as 1‑ITC‑140 (Burma). The conclusion drawn by the Tribunal is that:‑‑

"Ownership" for purpose of levy of wealth tax under the Wealth Tax Act, 1963 (since repealed) does not have the narrow and technical meaning that has been assigned to it by the CWT(A), it is significant that the term "owner" has not been defined in the Wealth Tax Act, 1963, and this, in our view, this is deliberate and if the law had indeed intended to define "owners" in a narrow technical sense of the word then it would have done so. The fact that the law had not done so shows that the law never intended to give it this narrow and technical meaning that has been wrongly held to be applicable by the CWT (A)". (SIC)

5. The assessee has now filed miscellaneous application in which it is contended that the Tribunal's order was erroneous and reliance placed on cited Supreme Court of Pakistan judgment is misplaced as the said judgment allegedly did not have relevance in the context of levy of wealth tax under the Wealth Tax Act, 1963 (since repealed). It has been further contended that the Tribunal has unjustifiably held earlier judgments of the Tribunal cited by the assessee when arguing the main appeal to be order passed "per incurium "and according to the applicant, the said judgments had binding force and were bound to have been followed by the Tribunal. Also, it has been pointed out by the learned A.R. of the applicant that the Hon'ble Lahore High Court had restrained the assessee from any sub‑letting of main plot and also its alienation.

6. As pointed out supra, the applicant has filed an affidavit with the miscellaneous application in which it has been stated that the Tribunal on 13‑8‑2003, when the main appeal had come up for hearing, had rejected the Departmental appeal and had so announced in open Court. This contention of the applicant has been looked into. Applicant has been told that as per noting made in the Court registers of both the Judicial Member and Accountant Member of the Bench, there is no mention of any judgment having been announced in open Court on 13‑8‑2003. Also, the Members of the Bench do not recall that had they made any such announcement nor is there any independent corroboration thereof. After discussion of the matter, the AR of applicant submitted that in actual fact he had gathered the impression" that the Departmental appeal had been rejected‑ and he acknowledged that the Bench did not make any specific announcement regarding rejection of the Departmental appeal: That being so, this part of the affidavit is rendered infructuous as it is admittedly based on a mis-appreciation of the actual position.

7. The Departmental representative has contested the submissions made by the learned AR and it is argued that the Tribunal having taken a conscious decision as to the meaning of the term "owner" as envisaged in wealth tax law that firm finding could not now be looked into afresh as it would amount to a "review" which is not permissible in law.

8. We have heard both sides and have examined the available record and our findings are recorded as under:‑‑

(1) The condition precedent for any action under section 35 of the Wealth Tax Act, 1963, is the existence of a mistake on the face of the record. According to the learned AR of applicant such a mistake is present insofar as the Supreme Court of Pakistan judgment cited by the Tribunal as (PLD 1964 SC 456) is statedly not applicable as the acts in that particular case are different from those obtaining in the present assessee's case insofar as the case of the assessee involves wealth tax assessment/appraisal of immovable property for purposes of levy of wealth tax whereas in the cited Supreme Court judgment, question of dower debt etc. was involved in view of the different context of the two cases, it is contended that there is both a factual as well as a legal mistake in the main order of the Tribunal, dated 15‑8‑2003 and hence recourse to the provisions of section 35 of the Wealth Tax Act, 1963 (since repealed) is justified. We have looked into the applicant's contention and in our considered judgment, the "ratio" of the cited Supreme Court of Pakistan judgment is fully applicable in the case of the present assessee. We have made it abundantly clear on page 6 of Tribunal's main order, dated 15‑8‑2003 that "ownership" for purposes of levy of wealth tax under the Wealth Tax Act, 1963 has a much broader, scope than the attached to it by the CWT(A). It has been pointed out that the term "owner" has not been specifically defined in the Wealth Tax Act, 1963 and this has been held to be deliberate because if the law had indeed intended to define "owner": in a narrow technical sense of the word then it would have done so (1 ITC 140 (Burma)). We have been explained that as held by the Supreme Court of Pakistan in (PLD 1964 SC 456), the rights of, the present assessee making payment for purchase of immovable property and who is in possession of the cited property are fully protected notwithstanding the fact that a registered sale‑deed had not been executed. Thus once payment has been made and possession handed over in the presence of a formal document viz. agreement to sell, there was no way the seller could curtail in any manner the rights of the purchaser in the said property and there was no way anyone claiming title to the said property under the seller could alter the rights of the purchaser to the purchaser's disadvantage. This finding of the Supreme Court of Pakistan has been found to be fully applicable in assessee's case, as the purchase of immovable property in assessee's is similar insofar as plot of land had been purchased without execution of sale‑deed and there is an agreement to sell, duly registered, payment has been made and possession handed over to the assessee. As per ratio of the Supreme Court of Pakistan judgment therefore, the assessee is now "owner" of the said plot of land under the Wealth Tax Law.

In view of the observations recorded, we hold that reliance placed by the Tribunal on the Supreme Court of Pakistan judgment cited as (PLD 1964 SC 456) is not misplaced.

2. When the assessee has himself asserted "ownership" of the said plot of land in the Return of net wealth filed by him and when the law protects the rights of the assessee who holds the cited property without fear of challenge from the seller or anyone acting under him, there cannot, in our considered judgment, be any doubt as to the assessee being "owner" of the said property "under wealth tax law". In the case of the present assessee, the said plot of land is‑ specifically cited by him in his Wealth Tax Return as his asset. A specific value has been attached to the said asset by the assessee in the return and the asset has been included in the assessee's net wealth. As assessee is admittedly in possession of the plot and has made full payment to the seller and formal agreement to sell has been executed and registered, the assessee is indeed the "owner" of the said plot "under wealth tax law".

3. The Tribunal in W.T.A. No. 1123/LB/00 (Assessment Year 1998‑99), dated 31‑7‑2003 has held that the assessee is "owner" of shop at Sadiq Plaza, for which payment at Rs.6,83,000 has been made and possession is admittedly with the assessee Notwithstanding the fact that sale‑deed has not been executed, it has been held that the "ambient circumstances' were compelling and clearly indicated "constructive ownership" of the assessee in respect of the premises and although the assessee in that case said that the payment made was only an "advance" the Tribunal rejected that contention and held the assessee to be "owner" of the shop. In the present assessee's case as well, it is asserted by the learned AR that payment made by the assessee for the plot may be treated as "advance" etc. Tribunal's judgment W.T.A. No.1123/LB of 2000 (Assessment Year 1998‑99), dated 31‑7‑2003 has been passed by the same Bench/Member that has passed judgment in W.T.A. No.1276/LB of 2002 (Assessment Year 2000‑2001), dated 15‑8‑2003. Precedent law of the Bench itself is of considerable significance and cannot be ignored by the Bench.

4. The judgments cited by the assessee before the Tribunal have been held to be orders passed "per incurium" as the law pertaining to meaning of "ownership" under wealth tax law has not been properly appreciated in the said judgments, as explained supra.

5. Notwithstanding the fact that the assessee has been stopped from sub‑letting/alienation of plot, he still, in our judgment, remains "owner" under wealth tax law, as explained supra. We reiterate here that under wealth tax law the term "owner" has a broader connotation than that ordinarily attached.

The present application is found to be devoid of any merit and is hereby rejected.

C. M. A./1064/Tax (Trib.) Application rejected.