1987 (12) TMI 71 - AT - Wealth-tax

Summary

Issues:
Jurisdictional dispute under Wealth-tax Act - Whether IAC had jurisdiction to pass assessment order under WT Act.

Analysis:
The appeals before the Appellate Tribunal ITAT BOMBAY-E involved jurisdictional issues under the Wealth-tax Act for the assessment years 1979-80 & 1980-81. The assessee and revenue both appealed against the order of the CWT(A), raising common issues. The assessee contended that the IAC lacked jurisdiction to pass an assessment order under the WT Act. The CWT(A) and the IAC rejected this contention, citing section 8 of the WT Act, which provides that the officer with jurisdiction under the Income-tax Act also has jurisdiction under the Wealth-tax Act. The assessee's counsel referred to a Madras High Court case, arguing that specific notification empowering the IAC was required for jurisdiction. The revenue countered, stating that the IAC, authorized to act concurrently with the ITO under section 127, automatically becomes the WTO under section 8, eliminating the need for a separate notification under section 8AA of the WT Act.

The Tribunal considered the submissions and found that the jurisdictional plea was raised by the assessee before the IAC and the CIT(A), contrary to the revenue's claim. The Tribunal emphasized that the essence of challenging an authority's jurisdiction was present, even if not raised in a specific manner. Regarding the interpretation of sections 8AA and 127(1), the Tribunal disagreed with the revenue's stance. It held that the notification under section 127 only authorized the IAC for powers under the Income-tax Act, not the WT Act. The Tribunal highlighted that section 8AA was enacted to confer concurrent jurisdiction on the IAC with the WTO, necessitating a separate notification. It referenced a Madras High Court case, emphasizing the need for a specific notification under section 8AA for the IAC's jurisdiction under the WT Act.

In line with the Madras High Court precedent, the Tribunal concluded that the IAC lacked jurisdiction to deal with the cases due to the absence of a notification. It set aside the CWT(A) order solely on this ground, without delving into the merits of the case. Consequently, the Tribunal allowed the assessee's appeals and dismissed the departmental appeals, ruling in favor of the assessee on the jurisdictional dispute under the Wealth-tax Act.