1981 (10) TMI 54 - AT - Wealth-tax

Summary

Issues Involved:
1. Revisability of WTO's orders under section 25(2) of the Wealth-tax Act.
2. Validity of notices issued by the Commissioner.
3. Validity of assessment orders mentioning a deceased person.
4. Representation of the estate of the deceased.
5. Jurisdiction of the Commissioner to correct errors in assessment orders.

Detailed Analysis:

1. Revisability of WTO's Orders under Section 25(2) of the Wealth-tax Act:
The first ground raised by the assessee was that the WTO's orders were not revisable as appeals against these orders were pending before the Commissioner. The assessee relied on the proviso to section 25(1). However, this contention was rejected based on the Bombay High Court's decision in Jagmohan Das Gokaldas v. CWT, which held that revisional powers under section 25(2) are not barred if the appellate court had not considered the order on merits. Thus, the Commissioner was within his rights to revise the orders.

2. Validity of Notices Issued by the Commissioner:
The assessee contended that the notices were invalid because they included the term "and others" without specifying who these others were. The Tribunal found this argument untenable, stating that the inclusion of "and others" did not invalidate the notices. The notices were directed at the estate of the deceased, which was represented by his son, Shri Dhirubhai M. Mehta, who had engaged an advocate to represent the estate. Therefore, the notices were deemed valid.

3. Validity of Assessment Orders Mentioning a Deceased Person:
The assessee argued that the assessment orders were null and void because they mentioned a deceased person, Smt. Hirabai M. Mehta. The Tribunal clarified that there is a difference between an assessment on a dead person and an assessment where the name of a dead person is mentioned due to an inadvertent error. The assessments were on the estate of Shri Maneklal A. Mehta, and the executrix, Smt. Hirabai M. Mehta, had died after the hearing but before the assessment orders were passed. This was considered an irregularity, not a nullity, and could be corrected under section 25(2).

4. Representation of the Estate of the Deceased:
The Tribunal examined whether the estate was fairly represented during the assessment proceedings. It was found that Shri Dhirubhai M. Mehta, the eldest son, had represented the estate and engaged an advocate. The estate was thus duly represented, and the assessments were not null and void. The Tribunal referenced the Supreme Court's decision in Guduthur Bros. v. ITO, which allows for the correction of procedural errors that occur after lawful initiation of proceedings.

5. Jurisdiction of the Commissioner to Correct Errors in Assessment Orders:
The assessee argued that the Commissioner could not exercise powers under section 25(2) because the assessee could have filed a revision application under section 25(1). The Tribunal rejected this contention, stating that the Commissioner could exercise powers under section 25(2) to correct errors prejudicial to the interests of the revenue. The errors in the assessment orders, such as the wrong status and name of the assessee, were prejudicial to the revenue and could be corrected by the Commissioner.

Conclusion:
The Tribunal upheld the Commissioner's order setting aside the assessment and rectification orders, directing the WTO to make fresh assessments in accordance with the law after giving the assessee a reasonable opportunity of being heard. The appeals were dismissed.