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TMI Blog2004 (5) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... law, it be held that order passed by the AO under the designation of Asstt. CIT (Inv.) Cir. 3(2), Pune, is an order passed without resuming jurisdiction under the relevant provisions of the Act and the order so passed is ab initio void. The order passed by the AO be held as null and void. 3. Without prejudice to ground Nos. 1 and 2, on facts and circumstances prevailing in the case and as per provisions of law, it be held that the value of share considered by the appellant at Rs. 194.85 is the proper value and is in accordance with the provisions of law. The value adopted by the AO at Rs. 209.33 is arguable and disputed and as such the issue being debatable is beyond the scope of provisions of s. 35 of the Act. The order passed by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stt. CIT, (Inv.) Cir. 3(2), Pune. He therefore, contended that this order was ab initio void. 6. We have heard the rival submissions and have perused the orders of the authorities below. We find that the Taxation Laws (Amendment) Act, 1975 had inserted a new s. 42C in the WT Act, 1957 w.e.f. 1st Oct., 1975. The provisions of s. 42C are as under: "42C: No return of wealth, assessment, notice, summons or other proceedings furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of wealth, assessment, notice, summons or other proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 35 dt. 11th Sept., 1995 has been served on 12th Sept., 1995, since there has been no response to this notice, the AO has presumed that the assessee had nothing to say in the matter and has passed the rectification order. Therefore, the claim of having passed the order without giving opportunity is unjustified and is rejected. As regards the claim that it has been passed by an IT authority and not a WT authority, it is seen that the AO has used the cyclostyled format for the order under s. 35 and has admittedly not corrected the pretyped designation of Asstt. CIT (Inv.) Cir. 3(2). However, by s. 42C of the WT Act corresponding to s. 292B of the IT Act, no return of wealth, assessment, notice, summons etc. furnished or made or issued, etc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n finalised and audited on 27th Nov., 1991 whereas the balance sheet as on 31st March, 1992 was finalised and audited on 15th Dec., 1992. On the date on which the return was filed, the latest balance sheet drawn up was of 31st March, 1991 and accordingly, the assessee had worked out the value as per r. 11 of Sch. III to the WT Act and the assessment has been completed under s. 16(3) on this basis. It is claimed that the rectification order substituting the value of shares with reference to the balance sheet as on 31st March, 1992 is invalid as the said balance sheet was drawn up and finalised subsequent to the filing of the return. It is further claimed that if the AO subsequently gets the copy of the balance sheet as on the valuation date, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Companies Act are subsequent to the dates of filing of return), the relevant balance sheet as on the corresponding valuation date has to be adopted. In the abovementioned circumstances, the AO clearly erred in determining the value of the shares on 31st March, 1992 on the basis of balance sheet of 31st March, 1991. The rectification is justified. The order under s. 35 is upheld." 11. In our opinion, the orders of the AO and of the CWT(A) are based on the provisions of Explanation to r. 11 of Part C of Sch. III r/w s. 7(1) of the WT Act, 1957 which is reproduced below. "Explanation For the purpose of this rule, "balance sheet" in relation to any company means the balance sheet of such company (including the notes annexed thereto and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation date of the assessee do not coincide. It is to meet such a situation that Expln. 1 is provided in r. 1D. The Explanation says that where the date on which the balance sheet is drawn up does not coincide with the valuation date of the assessee, "the balance sheet drawn up on a date immediately preceding the valuation date" shall be adopted as the basis for working the rule. Yet another situation contemplated by the Explanation is where both the above situations are absent, "the balance sheet drawn up on a date immediately after the valuation date" shall be adopted as the basis. This is the most reasonable thing to do. Once the basis of working the rule is the balance sheet, one must necessarily have the balance sheet. Without a balance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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