1973 (9) TMI 8 - HC - Wealth-tax

Whether the order of the Appellate Assistant Commissioner was bad in law for want of opportunity of hearing to the Wealth-tax Officer ? - Wealth-tax Officer does not have a right of being heard as a matter of course. The absence of opportunity of being heard given to the Wealth-tax Officer would not render the order of the Appellate Assistant Commissioner bad in law

Summary

Issues Involved:
1. Role and powers of the Appellate Assistant Commissioner under Section 23 of the Wealth-tax Act.
2. Whether the Wealth-tax Officer has a right to be heard in appeals before the Appellate Assistant Commissioner.
3. Principles of natural justice and fair play in the context of the Wealth-tax Act.

Issue-wise Detailed Analysis:

1. Role and Powers of the Appellate Assistant Commissioner under Section 23 of the Wealth-tax Act:
The court examined the role and powers of the Appellate Assistant Commissioner (AAC) in the context of the Wealth-tax Act, comparing it with the Indian Income-tax Act, 1922, and similar provisions in other tax laws. The AAC is not an ordinary court of appeal as understood under the Civil Procedure Code. The AAC's powers are plenary and conterminous with those of the Wealth-tax Officer (WTO), allowing the AAC to reassess and revise the entire assessment, not just the points raised by the assessee. The AAC can enhance the assessment if under-assessment is found, even if the assessee does not appear at the hearing.

2. Whether the Wealth-tax Officer has a Right to be Heard in Appeals Before the Appellate Assistant Commissioner:
The court held that the AAC is not required to give the WTO a right to be heard as a matter of course. The AAC's role is more akin to that of an assessing officer, and the AAC is supposed to look after the interests of the revenue. The absence of a specific provision in the Wealth-tax Act granting the WTO the right to be heard indicates that such a right was not intended by the legislature. The court noted that in other tax laws, such as the Income-tax Act, 1922, and the Business Profits Tax Act, specific provisions were made for the WTO's right to be heard, but no such provision exists in the Wealth-tax Act.

3. Principles of Natural Justice and Fair Play in the Context of the Wealth-tax Act:
The court rejected the Tribunal's reasoning that the WTO should be heard based on principles of natural justice and fair play. The AAC's role is not that of a judge deciding a dispute between two parties but is more of a revising authority with plenary powers. The AAC can look after the interests of the revenue without the WTO's presence. The court emphasized that the absence of a provision for the WTO's right to be heard does not violate principles of natural justice and fair play.

Conclusion:
The court concluded that the Tribunal was incorrect in holding that the WTO has a right to be heard as a matter of course and that the lack of such an opportunity would render the AAC's order invalid. The question was answered in the negative, and the Commissioner of Wealth-tax was directed to pay the costs of the assessees.

Question answered in the negative.