2002 (4) TMI 13 - HC - Wealth-tax

Assessing Officer issued an intimation under section 16(1)(a) accepting the wealth returned (under protest) without adjudicating the issue on the merits - The assessee challenged the said intimation in appeal before the Commissioner (Appeals) - Tribunal was justified in holding that section 23(1A)(a) of the Act provides for a right of appeal, against an intimation issued under section 16(1)(a)(i) of the Act so as to object to the amount of net wealth determined under the Act

Summary

Issues Involved:
1. Maintainability of appeal against an intimation under section 16(1)(a)(i) of the Wealth-tax Act, 1957.
2. Whether the assessee denied its liability to be assessed under the Act.
3. Applicability of the statutory provisions and judicial precedents.

Detailed Analysis:

1. Maintainability of Appeal:
The primary issue was whether an appeal filed by the assessee against an intimation issued under section 16(1)(a)(i) of the Wealth-tax Act, 1957, was maintainable. The Tribunal held that such an appeal was maintainable under section 23(1A)(a) of the Act. The Revenue contended that no appeal was maintainable against an intimation, as it merely indicated acceptance of the return without any assessment.

2. Denial of Liability to be Assessed:
The assessee filed the return under protest, contending that certain assets were not chargeable to wealth-tax. The Revenue argued that the assessee did not deny its liability to be assessed under the Act, as it had voluntarily filed the return. However, the court noted that the return was filed "without prejudice" to the assessee's legal rights, which signifies a denial of liability to be assessed under the Act.

3. Applicability of Statutory Provisions and Judicial Precedents:
The court examined the relevant statutory provisions, including sections 16 and 23 of the Wealth-tax Act. Section 16(1)(a)(i) deals with the issuance of intimation based on the return filed, while section 23(1A)(a) allows an appeal against the amount of net wealth determined or the wealth-tax payable. The court also considered various judicial precedents cited by both parties to determine the scope and interpretation of these provisions.

Consideration and Judgment:
The court observed that the return was filed under protest, indicating the assessee's denial of liability to be assessed under the Act. The court referred to the meaning of "without prejudice" as established in judicial precedents, noting that it implies that the filing of the return and payment of tax should not affect the assessee's legal rights. The court concluded that the assessee's act of filing the return under protest was sufficient to convey a denial of liability to be assessed under the Act.

The court held that the right of appeal is a statutory right and must be decided based on the provisions of the statute. It found that the assessee's appeal was maintainable under section 23(1A)(a) of the Act, as the return was filed without prejudice, indicating a denial of liability. The court also noted that the assessee's contention that the assets were not chargeable to wealth-tax had been upheld in a previous judgment.

Conclusion:
The court affirmed the Tribunal's order, holding that the appeal filed by the assessee against the intimation issued under section 16(1)(a)(i) was maintainable. The court dismissed the Revenue's appeal, emphasizing that the right of appeal could not be denied based on the facts of the case. The judgment was delivered in favor of the assessee, confirming the maintainability of the appeal and the denial of liability to be assessed under the Act.