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Issues: Original assessment rectification under Wealth Tax Act, jurisdiction of Commissioner to revise orders, admissibility of bad debts, jurisdiction under section 25(2) of the Wealth Tax Act.
Analysis: 1. The case involved original assessments for the assessment years 1975-76 and 1976-77 completed under section 16(1) of the Wealth Tax Act. The Wealth Tax Officer (WTO) rectified the original orders under section 35 of the Act by disallowing bad debts totaling Rs. 3,42,838 for both years. The Commissioner directed the WTO to revise the assessments by adding the amount of bad debts. The appeals were filed against the Commissioner's order. The Commissioner had considered the admissibility of bad debts in his order. 2. The counsel for the assessee objected to the Commissioner's interference with the original orders, arguing that the bad debts were advanced to a person whose assets were forfeited and who was in detention, making recovery impossible. The Department stressed the Commissioner's jurisdiction under section 25(2) to act on orders of the WTO, emphasizing that the original order was prejudicial to revenue. 3. The Department argued that the original order under section 16(1) and the rectification under section 35 were prejudicial to revenue, giving the Commissioner jurisdiction to protect revenue. The Department highlighted the separate appeals process for orders under section 16(1) and section 35 as indicative of the Commissioner's jurisdiction. 4. On the merits, it was noted that the assessee was a beneficiary of a Trust that advanced money to the debtor in question. The Commissioner found that there was a likelihood of recovery from the debtor, thus questioning the admissibility of bad debts. 5. The Tribunal accepted the assessee's preliminary objection, holding that the Commissioner lacked jurisdiction under section 25(2) to revise the rectified order of the WTO. The Tribunal emphasized that the rectified order was valid and the Commissioner could not revise it. The Tribunal also noted that the assessee's appeal against the rectified order further supported the validity of the rectification. 6. Consequently, the Tribunal ruled that the Commissioner's order under section 25(2) lacked jurisdiction and should be canceled, leading to the allowance of the assessee's appeals without delving into the merits of the case.
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