B.K. Mehta, J.
1. In these six references the facts of each case and the questions referred to us for our opinion are identical and we, therefore, intend to dispose of these references by this common judgment.
2. In these references, though the relevant assessment years are different they are all within the period from the assessment years 1960-61 to 1963-64. It appears that in the assessment of the respective respondents-assessees under the Wealth-tax Act for the respective assessment years, a claim was made on behalf of the assessees that the valuation of certain pieces of their land should not be included in the computation of the net wealth, they being agricultural land. That claim having been rejected by the Wealth-tax Officer, the assessees went in appeal before the Appellate Assistant Commissioner under section 23 of the Wealth-tax Act. The Appellate Assistant Commissioner accepted the claim and allowed the appeal. The Wealth-tax Officer, therefore, took the matters in further appeal before the Tribunal where in the course of hearing of the appeals, a contention was raised on behalf of the revenue, though not urged in the grounds of the memo of appeals, that as no notice of the date of effective hearing of the appeals was given to the Wealth-tax Officer, the order of the Appellate Assistant Commissioner was bad in law. This contention found favour with the Tribunal, as it was of the opinion that the Wealth-tax Officer being a party to the proceedings, should have been afforded an opportunity of being heard by service of the notice of the date of effective hearing, since such right is implicit in the scheme of the Wealth-tax Act or in any case on principles of natural justice and fair play because the Appellate Assistant Commissioner was an independent judicial officer who is not supposed to assume the role of a Wealth-tax Officer and the counsel of the department. The Tribunal having regard to the proceedings before the Appellate Assistant Commissioner found that the proceedings-sheet contains an order of giving notice to the Wealth-tax Officer of prior dates, there was neither any such order with regard to the effective date of hearing, nor was there any document to show that the Wealth-tax Officer had knowledge of the effective date of hearing. The Tribunal, therefore, accepted the appeals of the Wealth-tax Officer and remanded the matters to the Appellate Assistant Commissioner for disposing them a fresh after service of notice to the Wealth-tax Officer. At the instance of the assessees, therefore, the following question has been referred to us for our opinion;
'Whether the order of the Appellate Assistant Commissioner was bad in law for want of opportunity of hearing to the Wealth-tax Office ?'
3. The dispute in these references lies in a very narrow compass. The real point involved in this dispute is, what is the role of the Appellate Assistant commissioner while hearing appeals under section 23 of the Wealth-tax Act and his nature of powers. The powers and functions of the Wealth-tax Officer and the Appellate Assistant Commissioner under the Wealth-tax Act are more or less akin to those of the Income-tax Officer and the Appellate Assistant Commissioner under the Income-tax Acts and, therefore, it would be of advantage to address ourselves to this aspect of the matter before we answer the question referred to us. This aspect of the matter has been considered by various commissions and has come up for consideration before the courts on a number of occasions.
4. In Commissioner of Income-tax v. Rai Bahadur Hardutroy Motilal Chamaria, the court was concerned with the question, whether the Appellate Assistant Commissioner is entitled to travel outside the record, that is, returns made by the assessee or the assessment order of the Income-tax Officer, with a view to find out new sources of income and whether the power of enhancement under section 31(3) of the Indian Income-tax Act, 1922, is restricted to the sources of income which had been the subject-matter of consideration by the Income-tax Officer from the point of view of taxable income. In the context of this question, the Supreme Court, after approving the decision of the Bombay High Court in Narrondas Manordas v. Commissioner of Income-tax, regarding the width and scope of the power of the Appellate Assistant Commissioner under section 31(3), observed as under :
'It is necessary to bear in mind, in this connection, that it is only the assessee who has a right conferred under section 31 to prefer an appeal against the order of assessment made by the Income-tax Officer. If the assessee does not choose to appeal, the order of assessment becomes final subject to any power of revision that the Commissioner may have under section 33B of the Act. Therefore, it would be wholly erroneous to compare the powers of the Appellate Assistant Commissioner with the powers possessed by a court of appeal under the Civil Procedure Code. The Appellate Assistant Commissioner is not an ordinary court of appeal. It is impossible to talk of a court of appeal when only one party to the original decision is entitled to appeal and not the other party, and in view of this peculiar position the statute has conferred very wide powers upon the Appellate Assistant Commissioner once an appeal is preferred to him by the assessee. It is necessary also to emphasise that the statute provides that, once an assessment comes before the Appellate Assistant Commissioner, his competence is not restricted to examining those aspects of the assessment which are complained of by the assessee; his competence ranges over the whole assessment and it is open to him to correct the Income-tax Officer not only with regard to a matter raised by the assessee but also with regard to matter which has been considered by the Income-tax Officer and determined in the course of the assessment. It is also well established that an assessee having once filed an appeal cannot withdraw it. In other words, the assessee having filled an appeal and brought the machinery of the At into working cannot prevent the Appellate Assistant Commissioner from ascertaining and settling the real sum to be assessed, by intimation of his withdrawal of the appeal. Even if the assessee refuses to appear at the hearing, the Appellate Assistant Commissioner can proceed with the enquiry and if he finds that there has been an under-assessment, he can enhance the assessment...........'
5. The Supreme Court thereafter quoted with approval a passage from the judgment of Lord Right of the Court of Appeal in Rex v. Special Commissioners of Income-tax (ex parte Elmhirst). In Commissioner of Income-tax v. McMillan & Co., where a question arose before the Supreme Court, whether the Appellate Assistant Commissioner can form an opinion under the proviso to section 13 of the Indian Income-tax Act, 1922, whether the profits can be deduced from the books of account of the assessee, the court held by majority as under :
'The words 'in the opinion of the Income-tax Officer' in the proviso to section 13 of the Indian Income-tax Act, 1922, do not confer a mere discretionary power, but in their context impose a statutory duty on the Income-tax Officer to examine in every case the method of accounting employed by the assessee and (i) to see whether or not it is regularly employed, and (ii) to determine whether the income, profits and gains of the assessee can properly be deduced therefrom. The decision as to the method of accounting is to be arrived at first by the Income-tax Officer after a careful scrutiny of the accounts whether they be simple or complicated, and the power is to be reasonably and judicially exercised, which excludes any subjective or arbitrary decision by the Income-tax Officer; but the power so exercised is not clothed with finality and is not excluded from review by the Appellate Assistant Commissioner and in reviewing the order the appellate authority can exercise the same powers which the Income-tax Officer could exercise.'
6. The Supreme Court referred to the decision of the Bombay High Court in Narrondas Manordas's case, where the Bombay High Court has considered the scope of the powers of the Appellate Assistant Commissioner under section 31(3). In Narrondas Manordas's case the Bombay High Court has observed as under :
'Now, in order to understand what the competence of the Appellate Assistant Commissioner is and what are the powers conferred upon the Appellate Assistant Commissioner, it is not necessary to bear in mind certain salient facts. It is only the assessee who has a right conferred upon him to prefer an appeal against the order of assessment passed by the Income-tax Officer. If the assessee does not choose to appeal, the order of assessment becomes final subject to any power of revision that the Commissioner might have under section 33B of the Income-tax Act. Therefore, it would be wholly erroneous to try and compare the powers of the Appellate Assistant Commissioner with the powers possessed by a court of appeal under the Civil Procedure Code. The Appellate Assistant Commissioner is not an ordinary court of appeal in the sense in which that expression is understood in the Civil Procedure Code. It is impossible to talk of a court of appeal when only one party to the origin decision is entitled to appeal and not the other party, and in view of this peculiar position occupied by the Appellate Assistant Commissioner, the legislator, as we shall presently point out, has conferred very wide powers upon the Appellate Assistant Commissioner once an appeal is preferred to him by the assessee. If the assessee chooses to remain content with the order of the Income-tax Officer there is nothing that the Appellate Assistant Commissioner can do, however erroneous the assessment may be. But if the assessment is opened up by the action of the assessee himself, then the powers conferred upon the Appellate Assistant Commissioner are much wider than the powers of an ordinary court of appeal. The statute provides that once an assessment comes before the Appellate Assistant Commissioner, his competence is not restricted to examining those aspects of the assessment which are complained so by the assessee; his competence ranges over the whole assessment and it is open to him to correct the Income-tax Officer not only with regard to a matter raised by the assessee but also with regard to a matter which has been considered by the Income-tax Officer and determined in the course of the assessment.'
7. After referring to section 31(3), the Bombay High Court proceeded to observe as under :
'It will be immediately noticed that in giving the power of enhancing the assessment, the legislature has strikingly deviated from the ordinary principles that govern the court of appeal. Although the department cannot appeal against the order of the Income-tax Officer and although the appeal is only by the assessee, even so the legislature confers upon the Appellate Assistant Commissioner the power to make an order which is obviously to the prejudice of the appellant. Therefore, although the appellant may only complain of particular points in the assessment and he may be satisfied with regard to there of the assessment, the Appellate Assistant Commissioner's powers are not confined to consider only these points about which the assessee has a grievance but he may consider those points about which the assessee is satisfied and order the enhancement of the assessment.'
8. In S. N. Swarnammal v. Controller of Estate Duty, the Madras High Court while dealing with the question referred to it under the Estate Duty Act as to whether the Board of Revenue acted within their powers when they declined to admit the fresh contentions raised at the time of hearing of the appeal before them, Mr. Justice Ramanujam, speaking for the court, observed as under :
'It is well established an appeal before the Appellate Assistant Commissioner or before the Tribunal is a rehearing, and the appellate authority has got all the powers of the assessing authority.'
9. Similarly, in Commissioner of Income-tax v. Kanpur Coal Syndicate, the court in the context of the question - whether when the Income-tax Officer in his desecration assessed an association do persons to Income-tax, the Appellate Assistant Commissioner in appeal or the Income-tax Appellate Tribunal in further appeal can set aside that order and direct him to assess the members of that association individually - observed as under :
'Under section 31(3) (a) in disposing of such an appeal the Appellate Assistant Commissioner may, in the case of an order of assessment, confirm, reduce, enhance or annul the assessment; under clause (b) thereof he may set aside the assessment and direct the Income-tax Officer to make a fresh assessment. The Appellate Assistant Commissioner has, therefore, plenary powers in disposing of an appeal. The scope of his power is conterminous with that of the Income-tax Officer. He can do what the Income-tax Officer can do and also direct him to do what he has failed to do.'
10. In Rex v. Special Commissioners of Income-tax, the Court of Appeal was concerned with the question under the Income Tax Act, 1918, whether the assessee can withdraw the appeal after giving a notice of appeal against the assessment made by the Assistant Commissioner against him. Lord Wright M. R. observed as under :
'This is all I need say on the general procedure where there is no question of an appeal, and I may note here at once, that in making the assessment and in dealing with the appeals, the Commissioners are exercising statutory authority and a statutory duty which they are bound to carry out. They are not in the position of judges deciding an issue between two particular parties. Their obligation is wider than that. It is to exercise their judgment on such material as come before them and to obtain any material which they think is necessary and which they ought to have, and on that material to make the assessment or the estimate which the law requires them to make; They are not deciding a case inter parties; they are assessing or estimating the amount on which, in the interests of the country at large, the taxpayer ought to be taxed.'
11. Similarly, in Commissioners of Inland Revenue v. Sneath, Greer L. J. observed that the estimating authorities, even when an appeal is made to them, are not acting as judges deciding litigation between the subject and the Crown and that they are merely in the position of values whose proceedings are regulated by statute to enable them to make an estimate of the income of the taxpayer for the particular year in question. As stated above, the passage from Rex v. Special Commissioners of Income-tax has been accepted with approval by the Supreme Court in Commissioner of Income-tax v. Rai Bahadur Hardutroy Motilal Chamaria. It should be noted that the Indian legislature has followed the scheme of the British Act with slight modification as to the nomenclature of the authorities and difference in power here and there.
12. The role of the Appellate Assistant Commissioner has been considered by different Commissions. In the Report of the Taxation Enquiry Commission (1953-54), volume II, while dealing with the role of the Appellate Assistant Commissioner, the Commission has observed in paragraph 70 at page 236 as under :
'We are, therefore, of the opinion that, all things considered, the balance of advantage lies in leaving the existing structure unchanged. The demand for transferring the Appellate Assistant Commissioners away from the control of the Central Board of Revenue arises, in our opinion, from lack of a proper appreciation of the crucial fact that the assessment proceedings before the Income-tax Officer are not of the nature of judicial proceedings and that the Appellate Assistant Commissioner, so-called, is in essence not, and was never meant to be, anything more than a reviewing and revising departmental authority within the Income-tax department. The Appellate Assistant Commissioners go through the accounts themselves, receive additional evidence, examine the facts, review the whole assessment, and enhance it if income has been under assessed. It is unfortunate that this basic fact was lost sight of when the term Appellate Assistant Commissioner was first used in 1939. The misunderstanding could probably have been avoided if some such term as 'Deputy Commissioner' of Income-tax had been used.'
13. Similarly, the Direct Taxes Enquiry Committee in its final report of December, 1971, while dealing with the suggestion that the Appellate Assistant Commissioners should be placed outside the administrative control of the Central Board of Direct Taxes for ensuring their independence and fairness to the appellants, observed in paragraph 6.147 at page 156 as under :
'The Income-tax Act allows two appeals on facts, which is not the case even under the civil or criminal law. Therefore, it is proper that the first stage of appeal is in the nature of an administrative review. In any case, facts show that the Appellate Assistant Commissioners exercise their functions independently and impartially, and the Board do not seem to have interfered in any way with their judicial discretion'.
14. In a Report of the Income-tax, Investigation Commission, 1947, while dealing with the question - whether second appeal should be dispensed with under the Income-tax Act-the Commission observed in paragraph 322 at page 144 of its report :
'So far as the second point is concerned, in framing the question as we did, we were mainly impressed by the fact that there were two appeals on question of fact. Normally, in the civil judicature there is only one appeal on a question of act, and the second appeal lies only on a point of law, and we desired to know whether such a procedure could not with advantage be adopted in Income-tax matters. But the weight of opinion is definitely against the abolition of the second appeal on questions of fact. We recognise that Income-tax proceedings are somewhat different from the proceedings before the civil courts. In the latter, the judge is a person who is independent of parties, whereas in Income-tax matters, the Income-tax Officer is a party, an investigator and a judge, all rolled into one. The analogy of civil courts, therefore, may not justly be pressed.
15. It is, therefore, in this context that the assessees in this references have urged their contentions. It has been urged on behalf of the assessees that the entire approach of the Tribunal labours under a misapprehension as to the real role of the Appellate Assistant Commissioner and his powers while exercising the appellate jurisdiction. It was contended on behalf of the assessee that it is a misnomer to call the proceedings before the Appellate Assistant Commissioner an appeal in the sense in which it is merely a rehearing and reappraising of the assessment already made by the Income-tax Officer. It was contended that a dispute between a taxpayer and the State is not a dispute between a taxpayer and the Income-tax Officer. The Income-tax Officer is not a party in the sense in which we understand it in civil courts. The powers of the Appellate Assistant Commissioner being plenary powers of appeal are co-terminous with the powers of the Income-tax Officer and he is also, as the Income-tax Officer is, a party and a judge, though in appeal he is re-considering and revising the assessment already made. On behalf of the revenue, these contentions were contested. It was urged on behalf of the revenue that the correct role of the Income-tax Officer is that of a party, investigator and judge and once he completes the assessment work, he ceases to be a judge, but he none the less remains a party. To say that before the Appellate Assistant Commissioner, there are no two parties, is over-simplification of the matter. There are two parties before the Appellate Assistant Commissioner and they are the assessee concerned and the revenue as represented by the Income-tax Officer. It was, therefore, urged that having regard to the scheme of the Wealth-tax Act and more particularly section 23 and also having regard to the comparative schemes as contained in the Indian Income-tax Act, 1922 (as amended in 1939), Excess Profits Tax Act, 1940, and Business Profits Tax Act, 1947, there is no valid reason to impute any intention to the legislature that by not providing specifically in terms for an opportunity to the revenue to represent its case in appeals, it was intended that the Income-tax Officer representing the revenue shall have no right of being heard.
16. At the outset we must say that the learned Advocate-General, appearing on behalf of the assessee in Wealth-tax Reference No. 9 of 1970, was right when he submitted that the entire reasoning of the Tribunal suffers from misapprehension as to the role of the Appellate Assistant Commissioner while exercising his appellate jurisdiction. The Tribunal has observed in paragraph 11 of its order as under :
'....It should be remembered here that unlike the Wealth-tax Officer the Appellate Assistant Commissioner is supposed to act as an independent judicial official, who is not bound by the departmental rules. This being the position, he is not supposed to assume the role of the Wealth -tax Officer and act as a counsel of the department, at the time when the assessee leads his evidence in further inquiry contemplated by clause (b) of sub-section (4). This shows that the Wealth-tax Officer representing the judgment is a party necessary at the time; of the hearing of the appeal preferred under section 33 of the Act'
17. This assumption, as rightly contended by the learned Advocate-General, is based on the premise that the Appellate Assistant Commissioner is an appellate authority as we understand in civil courts. The role of the Appellate Assistant Commissioner and its historical background have been referred in the relevant paragraphs of the Commissions' reports set out hereinabove. The courts have considered as a well-established legal position that the Appellate Assistant Commissioner is not a civil court as we understand under the Civil Procedure Code, or for that matter a court of appeal under that Civil Procedure Code. It is no doubt true, as contended any the learned counsel loan behalf of the revenue, that there are limitations on the powers of this appellate authority, namely, that he cannot travel beyond the returns of the assessee or the record to the assessment proceedings, as they are before the Income-tax Officer, while exercising his appellate jurisdiction as an appellate authority for purposes of enhancing assessment. But none the less he is not in the position of a judge deciding a dispute. He is an appellate as well as a revising authority and his powers are much wider than the powers of an appellate court under the Civil Procedure Code or the Criminal Procedure Code. He can, subject to the limitations stated above, do whatever the Income-tax Officer could have done and his appellate powers are plenary powers including the power of reassessment. The Tribunal was, therefore, not right when it observed that the Wealth-Tax Officer has a right to represent the revenue before the Appellate Assistant Commissioner as a matter of course because the Appellate Assistant Commissioner was a judge deciding a dispute between the assessee concerned and the revenue. Having regard to the second proviso to section 31(3) of the Indian Income-Tax Act (as amended in 1939) and also having regard to section 17(4) of the Excess Profits Tax Act, 1940, read with rule 19(1) of the Excess Profits Tax Rules, 1940, and also in view of section 16(4) of the Business Profits Tax Act, 1947, read with rule 14(1) of the Business Profits Tax Rules, we are of the opinion that the legislature, when it thought fit to grant a right of hearing to the assessing officer, made a clear provision in the respective Acts. It should be noted that the second proviso to section 32(3) under the 1922 Act was introduced by the Amending Act of 1939. The Excess Profits Tax Act and the Rules thereunder are of 1940, and the Business Profits Tax Act and the Rules thereunder are of 1947. It is, therefore, not conceivable that, when the legislature put the Estate Duty Act, in 1953, or the Wealth-tax Act in 1957, or the Expenditure-tax Act in 1957 on the statute book, it was not aware of the role of the Appellate Assistant Commissioner and his powers and functions in exercise of his appellate powers. If the legislature had thought, as it has thought necessary under the Income-tax Act as well as the Excess Profits Tax Act as also the Business Profits Tax Act, to give a right of hearing to the assessing officer, it would have certainly made a suitable provision in the Estate Duty Act or the Wealth-tax Act, as done in the earlier Acts of 1939 or 1940 and 1947. Mr. Kaji made a serious attempt to Persuade us that the Income-tax Officer under the Income-tax Act of 1922, as well as of 1961, has a right to represent the Commissioner, and on behalf of the revenue while preferring an appeal before the Appellate Tribunal from the order of the Appellate Assistant Commissioner, and therefore, he should be considered as a party before the Appellate Assistant Commissioner also. We are not inclined to accept this contention of Mr. Kaji for the simple reason that no doubt a right of a appeal is given to the revenue from the order of the Appellate Assistant Commissioner before the Appellate Tribunal and at that time the legislature has empowered the Commissioner to direct the Income-tax Officer to file an appeal on his behalf, but that right which the assessing officer has, is got under a specific provision of the relevant Act. From that provision, we do not think it can be justifiable urged that the assessing officer is a party before the Appellate Assistant Commissioner. In our opinion, if such a right was intended to be conferred on the assessing officer, the legislature could have certainly made a suitable provision in the Act concerned. The very absence of such a provision under the Wealth-tax Act indicates that, though the legislature was aware of similar Provisions under the Indian Income-tax Act, Excess Profits Tax Act and the Business Profits Tax Act, and which were put on the statute book prior to the Wealth-tax Act, of 1961, which was placed on the statute book after the Wealth-tax Act, the legislature, however, did not think it fit to make an express provision confirming such a provision of service of notice by the Appellate Assistant Commissioner to the Wealth-tax Officer so as to grant his a consequential right; of hearing our attention to the provision contained in section 23(3) where on filing of an appeal the Appellate Assistant Commissioner has to fix a day and place for the hearing of the appeal and he may from time to time adjourn the hearing. It was contended that the fixation of the day and place for hearing has no significant meaning unless the intimation; of such date and place is to be given to the parties concerned. We have not been able to appreciate how the obligation of fixation of the date and place for hearing can imply that the intimation; of it should be given to the Wealth-tax Officer unless there is some such specific provision as one we have got in the Income-tax Act of 1922 or 1961. Consequently, the right of hearing the Wealth-tax Officer is also, in absence of a suitable provision like the one we have got in the second proviso to section 31(3) of the 1939 Act or the one we have got in section 250 of the 1961 Act, not implicit in the Wealth-tax Act. The Tribunal has been impressed with the contention that hearing of an appeal necessarily means hearing of a dispute between the two parties. We do not think that such an assumption is warranted. The interest; of the revenue can be certainly looked after by the Appellate Assistant Commissioner as is done by the assessing officer at the first stage. In this connection, though not conclusively, the relevant forms of appellate under the Wealth-tax Act to the Appellate Commissioner as well as to the Appellate Tribunal, are indicating that the legislature did not contemplate two parties before the Appellate Assistant Commissioner as it did when the matter came in appeal before the Appellate Tribunal.
18. The alternative reasoning of the Tribunal that on principles of natural justice and fair play the Wealth-tax Officer should have been heard is also in our view misconceived. When the role of the Appellate Assistant Commissioner is not that of a judge and is more or less akin to that of an assessing officer, both of whom are supposed to look after the interest of the revenue, it cannot be said that there would be violation of the; principles of natural justice and fair play, if the Wealth-tax Officer is not given an opportunity of being heard. As we have stated above, the Wealth-tax Officer would not, for all purposes and at all stages, represent the revenue and unless that right of representing the revenue is conferred by a specific provision in the Act, we do not think that is can be said that he has a right of being heard as a matter of course under the Wealth-tax Act. We do not intend to suggest hereby that, if there is practice in the department that a notice of lodging of an appeal or a notice of hearing of the appeal is given to the Wealth-tax Officer, it should be discouraged or discontinued. We also do not intend to say that the Appellate Assistant Commissioner, whenever he feels it necessary to hear the Wealth-tax Officer should not do it. It should also be noted that sub-section (3) (a) of section 23 of the wealth-tax Act has been brought on the statute book by the Taxation Laws Amendment Act, 1972, whereby the Appellate Assistant Commissioner has been placed under an obligation in an appeal, where the valuation of an estate is objected to, to hear the Valuation Officer who has made the valuation under section 16A, or in any other case, on a request being made in this behalf by the Wealth-tax Officer, any Valuation Officer nominated for that purpose by the Wealth-tax Officer. Though this provision is inserted after the relevant assessment years, it indicates that whenever the legislature thought fit to give a specific right of hearing to any of the officers under the Wealth-tax Act, it has made an appropriate provision in that behalf. In that view of the matter, we are of the opinion that the Tribunal was not right in holding that the Wealth-tax Officer has a right to be heard as a matter of course and the want of the opportunity of hearing afforded to him would render the order of the Appellate Assistant Commissioner bad in law.
19. In the result, the question is answered in the negative accordingly. The Commissioner of Wealth-tax shall pay costs of the assessees concerned.
20. Question answered in the negative.