Commissioner of Wealth Tax Vs. Alfred and Berg Co. (i) (P) Ltd. - Court Judgment

Excerpt:
- t.n. estates (abolition & conversion into ryotwari) act, 1948 [act no. 26/1948]. sections 5(2) & 67; [a.p. shah, cj, mrs. prabha sridevan & p. jyothimani, jj] suo motu revisional powers held, on a bare reading of the provisions of section 5(2) of the act, it is clear that the power conferred on the director by section 5(2) to cancel or revise any of the orders, acts or proceedings of the settlement officer is very wide. in the first place, the director need not necessarily be moved by any party in that behalf, and the power could be exercised either on an application by an aggrieved person or suo motu. for example, if the director comes to know that contrary to the scheme of the act or due to misrepresentation or fraud played, a patta had been granted to a person under the relevant provisions of the act, then to set right that mistake, the director should be enabled to exercise his power so as to effectuate the scheme of the act and to implement the purpose behind the act. the fact that the rule making authority has prescribed procedure in exercise of the powers under section 67 for making an application to the director does not mean that the suo motu power which is explicit in section 5(2) of the act is in any way curtailed or taken away. therefore, the contention of the respondent that making an application is sine qua non for invoking the power under section 5(2) of the act is not tenable. -- t.n. estates (abolition & conversion into ryotwari) act, 1948. sections 5(2) & 67; suo motu revisional powers held, on a bare reading of the provisions of section 5(2) of the act, it is clear that the power conferred on the director by section 5(2) to cancel or revise any of the orders, acts or proceedings of the settlement officer is very wide. in the first place, the director need not necessarily be moved by any party in that behalf, and the power could be exercised either on an application by an aggrieved person or suo motu. for example, if the director comes to know that contrary to the scheme of the act or due to misrepresentation or fraud played, a patta had been granted to a person under the relevant provisions of the act, then to set right that mistake, the director should be enabled to exercise his power so as to effectuate the scheme of the act and to implement the purpose behind the act. the fact that the rule making authority has prescribed procedure in exercise of the powers under section 67 for making an application to the director does not mean that the suo motu power which is explicit in section 5(2) of the act is in any way curtailed or taken away. therefore, the contention of the respondent that making an application is sine qua non for invoking the power under section 5(2) of the act is not tenable. n. v. balasubramanian, j. 1. the tribunal has stated the case and referred the following question of law under section 27(1) of the wt act, 1957 in relation to the asst. yrs. 1984-85 to 1987-88 of the assessee :'whether, on the facts and in the circumstances of the case, the tribunal was right in law and had valid materials in holding that the market value of the rented portion of the building should be excluded from the net wealth of the assessee for the assessment year under consideration ?'2. the assessee is a company, in which public are not substantially interested. the assessee is engaged in the business of manufacture of pharmaceuticals. the assessee also owns an immovable property situated at no. 1, hunters road, choolai. it is stated that during the relevant assessment years in question, the assessee had let out portion of the building to the tenants and realised rental income from the portion of the building let out to the tenants. the wto applied section 40(3)(vi) of the finance act, 1983 and held that the let out portion of the building was assessable to wealth-tax, which was confirmed by the cwt(a). the tribunal however, noticed the objects of the assessee-company as found in the memorandum of association and held that letting out portion of the building fell within one of the objects of the company and therefore the portion let out by the assessee was a business asset and the same was exempt under the provisions of section 40(3)(vi) of the finance act, 1983. the revenue has challenged the order of the tribunal by filing a reference and the tribunal has stated the case and referred the question of law stated earlier.3. we heard the learned counsel appearing for the revenue and learned counsel appearing for the assessee.4. we have considered a similar question in detail in tc nos. 102 to 105 of 1998 and by judgment dt. 20th nov., 2002 we have remitted the matter to the tribunal by holding that the presence of the object clause in the memorandum of association is alone not sufficient and the tribunal should consider whether the building was a business asset or not with reference to section 40(3)(vi) of the finance act, 1983 and also with reference to the terms of the lease deed under which the property was let out. in the instant case, the tribunal except considering the object clause in the memorandum of association has not considered the terms and conditions of the lease deed under which the building was let out. the tribunal also has to consider the terms of section 40(3)(vi) of finance act and then examine the question and even if it is commercial asset, it has to be considered whether it is excludible from the levy of wealth-tax. we find that there was no proper consideration by the tribunal and this matter requires to be remitted to the tribunal for fresh consideration.5. learned counsel for the assessee has also not seriously disputed that the matter requires remand. accordingly, without answering the question of law referred to us, we remit the matter to the tribunal with a direction to consider the question afresh.6. it is made clear that it is open to the parties to let in further evidence before the tribunal and it is always open to the tribunal to remit the matter to the ao for fresh consideration to decide the issue in accordance with law.