2004 (7) TMI 63 - HC - Wealth-tax

Whether Tribunal is right in law in holding that the provisions of section 7(4) of the Wealth-tax Act 1957 are applicable for the purpose of valuation of the assessee s residential house in respect of the assessment years 1973-74 1974-75 and 1975-76 although the relevant provision came into force from April 1 1976 and not with retrospective effect? - It is a well settled position that a rule providing a method of valuation of an asset is procedural in nature and thus is applicable to all pending assessments irrespective of the date on which it is incorporated Thus the question is answered in the negative i.e. against the Revenue and in favour of the assessee.

Summary

Issues:
- Interpretation of section 7(4) of the Wealth-tax Act, 1957 for valuation of residential property.
- Applicability of procedural rules to pending assessments.
- Benefit of procedural rules to be extended to all pending cases.

Analysis:
The High Court dealt with the interpretation of section 7(4) of the Wealth-tax Act, 1957 regarding the valuation of a residential property for the assessment years 1973-74 to 1975-76. The assessee had declared the value of her residential house, but the Wealth-tax Officer fixed a higher market value. The Appellate Assistant Commissioner reduced the value, and the assessee further appealed to the Tribunal, arguing that the valuation should be restricted based on the provision of section 7(4) of the Act. The Revenue contended that this provision, effective from April 1, 1976, was not applicable to the earlier assessment years. However, the Tribunal held that the provision was procedural and applied to all pending proceedings, ruling in favor of the assessee.

The High Court relied on established principles that procedural rules are generally applicable to all pending cases, regardless of the date of incorporation. Citing the decision in CWT v. Sharvan Kumar Swamp and Sons, the court emphasized that no suitor can claim a vested right in procedure. Referring to various judgments from different High Courts, the court reaffirmed that procedural laws apply to all pending assessments. Notably, the court highlighted the decision in CWT v. Lachmandas Bhatia, CWT v. Niranjan Narottam, CWT v. O.P. Tandon, CWT v. Vidyavathi Kapur, Dilip Kumar Mitra v. CWT, and Smt. Manjushree Biswas v. CWT to support its conclusion.

In conclusion, the High Court answered the question against the Revenue and in favor of the assessee, affirming the applicability of section 7(4) of the Wealth-tax Act, 1957 to the valuation of the residential property for the assessment years in question. The judgment underscored the principle that procedural rules should be extended to all pending cases, ensuring a fair and consistent application of the law in taxation matters.