1985 (9) TMI 4 - SC - Wealth-tax

Did the Appellate Assistant Commissioner of Wealth-tax have the power to rectify his predecessor s order dated June 26, 1970, in view of the fact that there was no error apparent on the face of the record because the question as to whether the Amending Act applied to assessments which were already completed was a debatable question - Appeal of revenue is allowed and the rectification order passed by the Appellate Assistant Commissioner is restored

Summary

Issues:
1. Power of Appellate Assistant Commissioner to rectify predecessor's order.
2. Applicability of Amending Act to completed assessments.

Analysis:

Issue 1: Power of Appellate Assistant Commissioner to rectify predecessor's order
The case involved a question regarding the power of the Appellate Assistant Commissioner to rectify his predecessor's order. The Appellate Assistant Commissioner sought to rectify an order excluding jewellery and ornaments from wealth-tax assessment. The High Court certified the question as of public importance but ultimately decided that the assessment in question was not final or complete, rendering the question irrelevant. The court held that the original assessment had not become final in the literal sense, as it could be modified under section 35 of the Wealth-tax Act. The order was still open to rectification, and therefore, the Appellate Assistant Commissioner had the power to rectify the order.

Issue 2: Applicability of Amending Act to completed assessments
The main contention raised was whether the Amending Act applied to assessments already completed. The High Court found this to be a debatable question, leading to the conclusion that it was not an error apparent on the face of the record. The court referred to previous decisions and highlighted that the assessment order, even if not appealed against, could still be modified under section 35 of the Act. Therefore, the argument that the Amending Act could not affect completed assessments was not accepted. The judgment emphasized that the rectification power was exercised under the original section of the Act, not the Amending Act, and the order was still subject to modification. The court held that the rectification order was valid, and the appeal challenging the High Court's decision was allowed.

In conclusion, the Supreme Court allowed the appeal and restored the rectification order passed by the Appellate Assistant Commissioner. The judgment clarified that the assessment order was not final in the literal sense and could be modified under the relevant provisions of the Wealth-tax Act. The court emphasized that the rectification power was not dependent on the Amending Act and that the Appellate Assistant Commissioner had the authority to rectify the predecessor's order.