Wealth Tax-Interpretation of Rule 1D - Board instructs officers to take note of high court order. - Income Tax - 1300/CBDT

INSTRUCTION NO. 1300/CBDT Dated: January 9, 1980 Section(s) Referred: 24(5) Statute: Wealth Tax Act, 1957 Reference is invited to Allahabad High Court decision in Commissioner of Wealth-tax vs. Sripat Singhania (112 ITR 363) on the question " whether, on the facts and in the circumstances of the case, the Tribunal was justified in approving the assessee's method of valuation in respect of unquoted shares in preference to the valuation adopted by the Wealth-tax authorities as per provision of Rule 1D of the Wealth-tax Rules, 1957 ?" 2. In reversing the decision of the Tribunal, the High Court has observed as under:- " We agree that the powers exercisable by the Tribunal u/s 24 are not different from that exercisable by the Wealth-tax Officer under section 7(1). The words as it thinks fit occuring in section 24(5). do not permit the exercise of the power otherwise than in accordance with the principles of the Act, and the rules framed there under. Assessment, appeal to the Appellate Assistant Commissioner and further appeal to Tribunal are parts of an integrated process. It is well established that an appellate court or authority exercisable same power as the trial Court or assessing authority we do not agree that the use of the expression 'as it thinks fit' in any manner takes away or whittles down the binding effect of rule 1D. The Tribunal has to consider the orders passed by the authorities below in the light of law applicable to those authorities. 3. The Board desire that while the above decision should be brought to the notice of all the officers working in your Charge, the Departmental Representatives should specifically be instructed to represent the departmental case before the Income-tax Appellate Tribunal in the light of the same.