1993 (10) TMI 52 - HC - Wealth-tax

Summary

Issues Involved:
1. Justification of the Tribunal's decision to set aside the lower authorities' order and restore the matter regarding the valuation of self-occupied property to the Wealth-tax Officer.
2. Determination of whether rule 1BB of the Wealth-tax Rules, 1957, is procedural in nature and retrospective in operation.

Summary:

Issue 1: Justification of Tribunal's Decision
The Tribunal set aside the order of the lower authorities and restored the matter regarding the valuation of self-occupied property to the Wealth-tax Officer. The Tribunal directed the Wealth-tax Officer to reframe the assessment in accordance with law and as per the decision of the Special Bench of the Income-tax Appellate Tribunal, Delhi Bench 'A', dated February 17, 1981, in the case of Shri Biju Patnaik, New Delhi. The Tribunal also observed that valuation in respect of property other than self-occupied property will be subject to valuation afresh, and the assessee will be entitled to place any evidence before the Wealth-tax Officer.

Issue 2: Nature and Retrospective Operation of Rule 1BB
The Tribunal held that rule 1BB of the Wealth-tax Rules, 1957, is procedural in nature and retrospective in operation. This conclusion was based on various judicial precedents, including decisions from the Allahabad High Court in CWT v. Laxmipat Singhania [1978] 111 ITR 272, the Karnataka High Court in CWT v. Vidyavathi Kapur [1984] 150 ITR 319, the Madhya Pradesh High Court in CWT v. Lachmandas Bhatia [1987] 163 ITR 586, the Gujarat High Court in CWT v. Kasturbhai Mayabhai [1987] 164 ITR 107, and the Calcutta High Court in Manjushree Biswas v. CWT [1988] 171 ITR 348. These courts held that procedural rules, including rule 1BB, apply to pending assessments and are retrospective in nature.

The judgment emphasized that section 7 of the Wealth-tax Act provides the machinery for determining the value of assets and is subject to rules made in this behalf. Rule 1BB, introduced to eliminate arbitrariness in valuing residential houses, applies retrospectively to all pending assessments. The Tribunal's decision aligns with the principle that procedural amendments apply to ongoing proceedings unless explicitly stated otherwise.

Conclusion:
The Tribunal was justified in setting aside the lower authorities' order and restoring the matter regarding the valuation of self-occupied property to the Wealth-tax Officer. Additionally, rule 1BB of the Wealth-tax Rules, 1957, is procedural in nature and retrospective in operation, thus applicable to the year under consideration.