1989 (10) TMI 51 - HC - Wealth-tax

Summary

Issues:
1. Interpretation of section 16A(6) of the Wealth-tax Act regarding the binding nature of the Valuation Officer's report on the Wealth-tax Officer.
2. Jurisdiction of the Appellate Assistant Commissioner to refer matters to the Valuation Officer.
3. Revisionary powers of the Commissioner under section 25(2) of the Act.
4. Challenge to the Commissioner's order and the jurisdictional aspect of the same.

Analysis:
The judgment involved an application under section 27(3) of the Wealth-tax Act, 1957, seeking a statement of the case from the Appellate Tribunal, Indore Bench, Indore. The case pertained to the valuation of a plot of land for assessment years 1964-65 to 1973-74. The Wealth-tax Officer initially assessed the plot at different rates per square foot for various assessment years. Upon challenge by the assessee, the Appellate Assistant Commissioner set aside the assessments and directed the Wealth-tax Officer to refer the matter to the Valuation Officer for fresh assessment based on proper valuation.

Subsequently, the Wealth-tax Officer, despite obtaining the Valuation Officer's report, did not base the valuation on it for the reassessment. The Commissioner of Income-tax held the Wealth-tax Officer's orders as erroneous and prejudicial to revenue, directing a fresh assessment in conformity with the Valuation Officer's report. However, the Income-tax Appellate Tribunal disagreed, stating that section 16A was not applicable, and the Wealth-tax Officer was not bound by the Valuation Officer's report. The Tribunal quashed the Commissioner's order.

The Department filed a reference application under section 27(1) of the Act, questioning the Tribunal's decisions on the binding nature of the Valuation Officer's report, the applicability of section 16A, and the Commissioner's directive to accept the report. The court analyzed the Wealth-tax Officer's quasi-judicial discretion under section 16A(1) and emphasized that the appellate authority cannot dictate the exercise of this discretion. It cited precedents to establish that the Appellate Assistant Commissioner lacked jurisdiction to refer the matter to the Valuation Officer and that once the Wealth-tax Officer acted on such directions, the order merged with the Appellate Assistant Commissioner's order, precluding revision by the Commissioner under section 25(2).

The court rejected the reference application, stating that the questions raised were covered by previous judgments, particularly M. V. Kibe's case, and did not present any new legal issues. It highlighted that the jurisdictional aspect could be challenged at any stage, emphasizing the non-binding nature of an order issued without jurisdiction. Ultimately, the court held that the reference application did not raise any substantial question of law for its consideration, leading to its rejection.