ORDER
--Appellate authority had considered issue not covered by revisional order
Ratio :
Only that portion of the order of assessment merges with the appellate order which has been considered and decided by the appellate authority, the impugned order in respect of the matters which are not covered by the appellate order and are left untouched, to that extent survives permitting the exercise of revisional jurisdiction by the Commissioner.
Held :
The power conferred upon the Commissioner under section 25(2) of the Wealth Tax Act to revise an order passed by the Wealth Tax Officer is in identical terms with the power conferred under section 263 of the Income Tax Act, 1961, to revise an order passed by the Income Tax Officer under the Income Tax Act, 1961. The position of law that emerges from the law is that although the doctrine of merger applies to the Wealth Tax Act proceedings, the extent to which it applies depends upon the scope and subject-matter of appeal and the decision rendered by the appellate authority. In case the order of assessment passed by the Wealth Tax Officer has been challenged by the assessee before the Appellate Assistant Commissioner in respect of only some of the items covered by the Wealth Tax Officer's assessment order and the remaining items forming part of the impugned order of assessment have neither been raised nor decided by the appellate court suo motu and no decision has been given by the appellate authority in respect of those items, only that portion of the order of assessment merges with the appellate order which has been considered and decided by the appellate authority. In other words, the matters which are not covered by the appellate order of the Appellate Assistant Commissioner and are left untouched, the impugned order of assessment to that extent survives permitting the exercise of revisional jurisdiction by the Commissioner under section 25(2) of the Wealth Tax Act. Therefore, the assessment orders had not merged with the orders of the appellate authority and that being so, the Commissioner of Wealth Tax had jurisdiction to revise the said assessment orders.
Case Law Analysis :
CIT v. East Coast Marine Products (P) Ltd. (1990) 181 ITR 314 (AP);CIT v. Late Begum Noor Banu Alladin (1993) 204 ITR 166 (AP) (FB);CIT v. K.L. Rajput (1987) 164 ITR 197 (MP) (FB);Kaliki Veera Reddy & Co. v. State of Andhra Pradesh (1974) 34 STC 517 (AP);State of Madras v. Madurai Mills Co. Ltd. AIR 1967 SC 681: (1967) 19 STC 144 (SC) followed.
Application :
Also to current assessment years.
A. Y. :
1971-72 to 1974-75
Wealth Tax Act 1957 s.25(2)
WEALTH TAX
Revision--RECORD--Taking subsequent valuation report into consideration
Ratio :
The Commissioner had taken the subsequent valuation report into consideration while invoking the provisions of section 25(2) of the Wealth Tax Act and no fault could be found with the order because it has jurisdiction and power to do so, vide Explanation (b) to section 25(2).
Held :
The Commissioner had found from the record that as early as 1972, the assessing authority had formed the opinion on the basis of local enquiries that the cost of construction and the value of the premises in question have been greatly underestimated by the approved valuer relied upon by the assessee and, therefore, the case should be referred to the valuation cell and thereafter the engineers of the cell had actually inspected the building in that year and had come to the conclusion that the cost of construction and the market value of the building as also the value of the land is much higher than returned by the assessee. However, the Wealth Tax Officer accepting the figures returned by the assessee had made the assessment in 1978. This fact makes the observations of the Income Tax Appellate Tribunal incorrect and wrong that the Commissioner had revised the assessment order on the basis of the subsequent report of the Valuation Officer. Explanation 2 was inserted by the Finance Act, 1985, with effect from 1-4-1976. Explanation (b) to sub-section (2) of section 25 of the Wealth Tax Act, reads as under :'Explanation.-For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,-...(b) `record', shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; .....'In clause (b), after the word 'record', the words 'shall include and shall be deemed always to have included' have been inserted by the Finance Act of 1989, with effect from 1-6-1988.Even if it is assumed that the Commissioner had taken the subsequent valuation report into consideration while invoking the provisions of section 25(2) of the Wealth Tax Act, no fault can be found with the order because it has jurisdiction and power to do so, vide Explanation (b) to sub-section (2) of section 25 of the Wealth Tax Act.
Case Law Analysis :
South India Steel Mills v. CIT (1997) 224 ITR 654 (SC) relied.CIT v. East Coast Marine Products (P) Ltd. (1990) 181 ITR 314 (AP); CIT v. Late Begum Noor Banu Alladin (1993) 204 ITR 166 (AP) (FB); CIT v. K. L. Rajput (1987) 164 ITR 197 (MP) (FB); Kaliki Veera Reddy & Co. v. State of Andhra Pradesh (1974) 34 STC 517 (AP); State of Madras v. Madurai Mills Co. Ltd. AIR 1967 SC 681 ; (1967) 19 STC 144 (SC) followed.
Application :
Also to current assessment years.
A. Y. :
1971-72 to 1974-75
Wealth Tax Act 1957 s.25(2)