1963 (4) TMI 78 - HC - Income Tax

Summary

Issues Involved:
1. Construction of proviso (b) to sub-section (1) of section 25 of the Wealth-tax Act, 1957.
2. Validity of the Wealth-tax Officer's valuation of shares.
3. Competence of the revision applications filed by the petitioner.
4. Right of the assessee to withdraw an appeal before the Appellate Tribunal.
5. Jurisdiction of the Commissioner of Wealth-tax to revise the orders in question.

Issue-wise Detailed Analysis:

1. Construction of Proviso (b) to Sub-section (1) of Section 25 of the Wealth-tax Act, 1957:
The primary issue was the interpretation of proviso (b) to section 25(1) of the Wealth-tax Act, which restricts the Commissioner from revising any order that is "the subject of an appeal" before the Appellate Tribunal. The petitioner argued that an order is only the subject of an appeal when the Tribunal addresses the merits of the case and pronounces its view. Conversely, the respondent contended that the mere filing of a competent appeal suffices to make the order the subject of an appeal. The court sided with the petitioner, holding that the order must be scrutinized on its merits by the appellate authority to be considered the subject of an appeal.

2. Validity of the Wealth-tax Officer's Valuation of Shares:
The petitioner challenged the valuation method adopted by the Wealth-tax Officer for shares of certain companies. The Wealth-tax Officer had rejected the petitioner's valuation method and adopted another method, which was subsequently upheld by the Appellate Assistant Commissioner. The petitioner sought to revise these valuations through the Commissioner of Wealth-tax, arguing that the valuations were based on an incorrect basis not warranted by law.

3. Competence of the Revision Applications Filed by the Petitioner:
The petitioner filed revision applications before the Commissioner of Wealth-tax after withdrawing appeals from the Appellate Tribunal. The Commissioner dismissed these applications as incompetent, citing that the orders had already been the subject of an appeal. The court found this dismissal unjustified, stating that the orders were not the subject of an appeal since the Tribunal had not decided on the merits but had permitted the withdrawal of the appeals.

4. Right of the Assessee to Withdraw an Appeal Before the Appellate Tribunal:
The petitioner's chartered accountant requested the Tribunal to withdraw the appeals, which was granted, and the appeals were dismissed for non-prosecution. The court held that the Tribunal's permission to withdraw the appeals meant that the orders of the Appellate Assistant Commissioner were not the subject of an appeal. The court emphasized that the right to withdraw an appeal, once granted by the Tribunal, does not imply the orders remain the subject of an appeal.

5. Jurisdiction of the Commissioner of Wealth-tax to Revise the Orders in Question:
The court examined whether the Commissioner had jurisdiction to revise the orders after the appeals were withdrawn. It concluded that the Commissioner was wrong in dismissing the revision applications on the grounds of incompetence. The court quashed the Commissioner's order and directed him to dispose of the revision applications in accordance with the law, considering the possibility of condoning the delay in filing the revisions due to sufficient cause.

Conclusion:
The court quashed the order of the Commissioner of Wealth-tax and directed that the revision applications filed by the petitioner be disposed of in accordance with the law. The court emphasized that the orders of the Appellate Assistant Commissioner were not the subject of an appeal after the Tribunal permitted the withdrawal of the appeals. The court also noted that the Commissioner has the power to admit revision applications filed beyond the period of limitation if sufficient cause is shown. The respondent was ordered to pay the costs of the petitioner.