1982 (9) TMI 121 - AT - Wealth-tax

Summary

Issues:
Applicability of section 20A of the Wealth-tax Act, 1957 to the assessment year 1979-80.

Detailed Analysis:
The appeal involved a narrow issue of whether section 20A of the Wealth-tax Act, 1957, inserted by the Finance (No. 2) Act, 1980, applied to the assessment year 1979-80. The case revolved around a Hindu Undivided Family (HUF) that had partially partitioned its property on 25-1-1979, effective from 1-1-1979. The Wealth Tax Officer (WTO) disregarded the partial partition claim based on the new provisions of section 171(9) of the Income-tax Act, 1961, inserted by the Finance (No. 2) Act, 1980, which deemed partial partitions after 31-12-1978 as void for assessment purposes.

The Appellate Assistant Commissioner (AAC) upheld the WTO's decision, stating that the new provisions applied to the assessment year 1979-80. However, the Income Tax Appellate Tribunal (ITAT) held that the amended section 20A, effective from 1-4-1980, did not apply to the assessment year 1979-80. The ITAT cited the specific intent and purpose of the amendment, which was explained in the Finance (No. 2) Bill, 1980, to be applicable from 1-4-1980 for the assessment year 1980-81 and subsequent years.

The ITAT emphasized that the amendment's delayed commencement indicated a deliberate legislative choice. The Tribunal relied on legal principles that statutes come into operation on the specified date and that tax laws must be interpreted based on clear language without implication or intendment. The ITAT concluded that the WTO should assess the assessee for the year 1979-80 under the pre-amendment section 20, without considering section 20A.

The ITAT highlighted the importance of adhering to the expressed legislative intent and held that any finding related to the partial partition for the assessment year 1979-80 should be treated as null and void. The Tribunal directed the WTO to evaluate the assessee's claim based on the law as of 1-4-1979. The decision allowed the assessee's appeal, setting aside the lower authorities' orders and directing a reevaluation of the claim in light of the pre-amendment law.

In conclusion, the ITAT's judgment clarified the non-applicability of section 20A to the assessment year 1979-80, emphasizing legislative intent, statutory interpretation principles, and the specific effective date of the amendment outlined in the Finance (No. 2) Bill, 1980.