9911796707
TMI Blog1994 (11) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... in isolation, be held to be erroneous and prejudicial to the interests of the Revenue. (c) The proceedings under s. 25(2) had become time-barred in so far as that the original assessment was completed on 19th March, 1985. II. On the merits of the case: (a) That the learned CWT was not justified, on the facts and in the circumstances of the case, in denying exemption to heirloom Jewellery and Samora Bagh Palace under s. 5(1)(xiv) and 5(1)(iii) respectively, of the WT Act, 1957. 3. Shri N.M. Ranka and Shri Raj Kumar Yadav, advocates, appeared for the assessee while Shri S.P. Singh appeared for the Department. 4. The assessee is an HUF and had filed its wealth-tax return for asst. yr. 1980-81 declaring a net wealth of Rs. 7,06,376. The assessment was completed on 19th March, 1985 assessing the net wealth at Rs. 53,06,844. Besides other additions, with which we are not concerned, additions in respect of heirloom jewellery valued at Rs. 19,30,000 and in respect of Samora Bagh Palace valued at Rs. 25,00,000 were also made. The assessee filed an appeal before the first appellate authority challenging these additions on 8th April, 1985. 5. Before the aforementioned appeal came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Rs. 2,76,796. This same figure is shown in this year too. The details are not available. Considering the prices of precious metals in the year 1971 and 1980 I adopt the value of jewellery (heirloom) at Rs 19,30,000. The assessee has declared the value of City Palace as exempt. It is noticed that the assessee has given one property viz., Samore Bagh to his son M.K. Mahendra Singhji in the year 1964. It has been pleaded by Shri Mahendra Singhji in the course of assessment proceedings in his case that this property has not been transferred in his name and the ownership still lies in the HUF of Maharana Bhagwat Singhji. The assessee was requested to state about this. It has been argued by Shri O.P. Chaplot, C.A. that this is part of boundry of City Palace for which specific exemption is there from wealth-tax ambit. The assessee's authorised representative, however, could not substantiate this claim with any evidence. Since the point is not free from doubt its value, which is estimated at Rs. 25,00,000 is added to the wealth of the assessee. It has been submitted by the learned counsel that the addition so made has since been deleted by the WTO in his order dt. 22nd March, 1988 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er stage, if necessary. 16. The learned Departmental Representative, on the other hand, strongly supported the order under s. 25(2) and submitted that the learned CWT was empowered to take action under s. 25(2). 17. After hearing the rival submissions and perusing the material placed before us, we have given a deep thought to the matter and proceed to deal with it in the paras to follow. 18. We take the first ground first, that is mentioned in sub-cl. (a) of cl. I of Para 2 of this order, namely, the one involving principles of natural justice. 19. The important question raised before us is that whether the same person can adjudicate upon the same issue in two different capacities, and if so, can he take an opposite view over the issue in later capacity than the one he took in his earlier capacity? 20. In our view, a person while acting in one capacity and performing quasi-judicial function, has taken one view over an issue in a particular case, the same person should not sit on judgment over the same issue in the same case, while performing quasi-judicial function in different capacity. This would clearly be in violation of the principles of natural justice. Of course, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition, finally observes that "since the point is not free from doubt, its value, which is estimated at Rs. 25 lacs is added to the wealth of the assessee." 25. And then, at para 6 of his order, the learned CWT(A) rejected these grounds by observing that the same have become infructuous as the additions have been deleted by the WTO by an order passed under s. 35. 26. The question now arises: did the CWT(A) decide its ground in his appeal at all. The clear finding of fact is that he did not decide the issues but dismissed the grounds as not pressed. In other words he did not express his opinion on the issues as he accepted the plea of the assessee that the dispute no longer exists by virtue of the rectification order passed under s. 35. 27. There is little doubt that he did not decide the issue, but one is certainly led to believe that he did consider them. The fact that he has reproduced verbatim the relevant portion from the Assessing Officer's order, it can be certainly presumed that he must have given some thought to it or at least must have read it. Having presumed that he has read it, the substantial enhancement in the value of heirloom jewellery and the WTO's observa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... himself did not bring the dispute to the end. 32. Hence we reject the second contention of the assessee. 33. The third ground on which the legality of action under s. 25(2) is challenged is the ground of limitation. 34. The learned counsel for the assessee submitted that since order under s. 35 formed an integral part of the original order, it had no existence of its own and the original order having been passed on 19th March, 1985, the period of limitation prescribed under s. 25(3) was over and hence the order under s. 25(2) was bad in law. 35. We are unable to accept this contention. If the contention is accepted, it would lead to an absurd situation. For many cases the provisions of s. 25(2) may become redundant. All rectification orders which are erroneous and prejudicial to the interest of the Revenue and passed after two years from the end of the financial year in which the original orders was passed, will never be subjected to revision under s. 25(2). In principle, the period of limitation should be reckoned with reference to the order from which the cause of action arises and that is what is exactly intended by s. 25(3). If the various provisions are looked at harm ..... 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