9911796707
TMI Blog2016 (11) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... ulations will have no application for the purpose of valuation of building in dispute and it will have to be made only in accordance with Schedule III, as it is. We therefore, answer substantial questions of law formulated above, by holding that Regulations 1996 are not retrospective but operates on and after 28.6.1996 that is the date of publication of notification in the Gazette but it would make no difference in the present case, for the reasons that these Regulations have no application to the disputed property which has to be valued as per the procedure prescribed in Schedule III of Act, 1957. All the questions are therefore, answered in favour of Revenue and against Assessee - Wealth-Tax Appeals Nos. 169 of 2005, 194 of 2006, 68 of 2007, 575, 576, 578 and 579 of 2011, 204, 205, 206, 241, 292, 294, 295 and 395 of 2012 - - - Dated:- 10-11-2016 - Hon'ble Sudhir Agarwal And Hon'ble Kaushal Jayendra Thaker, JJ. For the Appellant : A.N. Mahajan (S.C), Shubham Agarwal For the Respondent : R.S. Agarwal, S.D.Singh ORDER ( Delivered by Hon'ble Sudhir Agarwal, J ) 1. We have heard Shri Shubham Agrawal, learned counsel for the appellant and Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Wealth Tax Appeal no. before Tribunal 1 68 of 2007 1987-88 29.11.2001 37/Alld/2000 2 575 of 2011 1988-89 06.07.2004 14/Luc/2002 3 292 of 2012 1989-90 06.07.2004 29/Luc/2002 4 576 of 2011 1990-91 06.07.2004 22/Luc/2002 5 205 of 2012 1991-92 06.07.2004 23/Luc/2002 6 295 of 2012 1992-93 06.07.2004 24/Luc/2002 7 578 of 2011 1993-94 06.07.2004 25/Luc/2002 8 294 of 2012 1994-95 06.07.2004 26/Luc/2002 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y received information that in Wealth Tax return, value of disputed property was not disclosed. Notices were issued to family members to ascertain ownership of the said house. Assessee thereafter suo-motu filed revised return of Wealth Tax, dated 26.3.1998, wherein disputed property was included in the net wealth of Assessee. A.O treated this revised return as nonest since regular proceedings were already completed. Consequently notice u/s 17 of Act, 1957 was issued in reply whereto Assessee submitted that revised return filed on 26.3.1998 itself be treated as reply in response to the said notice. In the revised return of Wealth Tax, Assessee had shown value of disputed property at ₹ 26,77,995/-, based upon valuation report of M/s S.K. Ahuja and Associates. 9. A.O. being not satisfied, made reference to District Valuation Officer (hereinafter referred to as 'D.V.O.') u/s 16A of Act, 1957 who estimated value of disputed property at ₹ 5,82,09,605/-. 10. Assessee filed objection to valuation report of D.V.O and also contended that, valuation should be made in accordance with rule 3 of Act, 1957, D.V.O. has not considered the fact that disputed property wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application for valuation of disputed property on the date i.e. 31.3.1987. The said Regulations, 1996 would have no application to a period prior to its enactment. He also said that purpose of Regulations, 1996 was to regulate future construction and not for assessment of existing one, which was already raised/existed. At that time there was no occasion to raise construction in conformity with Regulations, 1996. 15. Learned counsel for respondent on the contrary sought to advance his submissions to support the view taken by Tribunal and we shall discuss the same in detail while considering issues on merits. 16. Tribunal has held that in view of Rule 6 Explanation (b) (iii), Proviso, to Schedule III of Act, 1957, since a minimum area is required to be kept open and it being any law for the time being in force shall prevail over specified area mentioned in Rule 6 Explanation (b) (iii) of Schedule III of Act, 1957. Moreover Regulations, 1996 being a procedural statute, will have to be read retrospectively for the purpose of determining market value, the said Regulations have to be read with Rule 6 Explanation (b) (iii) of Schedule III to ascertain Specified Area . 17. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any assessment year etc. have not been disclosed, he will be required to provide such material facts and then A.O. would proceed for assessment or re-assessment for such net wealth. In the present case, this net wealth which according to A.O. has escaped assessment or in respect whereof material facts were not disclosed consisted of disputed property. Hence, its value had to be assessed. For the purpose of assessment of value of a property, a mechanism has been provided in the Act, 1957 itself and that leads us to Section 7 thereof. 20. Since in the present appeals, we are concerned with assessment years 1987-88 to 2001-02, we find that Section 7 in between the aforesaid period of assessments has undergone amendment and therefore, the earlier provision as well as subsequently amended provision both will have to be examined. 21. Section 7 as it was up to 31.3.1987, read as under: 7. Value of assets, how to be determined- (1) Subject to any rules made in this behalf, the value of any assets,other than cash, for the purposes of this Act, shall be estimated to be the price which in the opinion of the Assessing Officer, it would fetch if sold in the open market on the valua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tch if sold in the open market on the valuation date next following the date on which he became owner of the house, or on the valuation date relevant to the assessment year commencing on the 1st day of April, 1971, whichever valuation date is later: Provided that where more than one house belonging to the assessee is exclusively used by him for residential purposes, the provisions of this sub-section shall apply only in respect of one of such houses which the assessee may, at his option, specify in this behalf in the return of net wealth. Explanation- For the purposes of this sub-section,- (i) where the house has been constructed by the assessee he shall be deemed to have become the owner thereof on the date on which the construction of such house was completed; (ii) house , includes a part of a house,being an independent residential unit. (emphasis added) 22. Sub section(1) of Section 7 as it was up to 31.3.1987 shows that it was subjected to any Rules made in this behalf. The Rule Framing Authority had framed Rule 1BB under Wealth Tax Rules, 1957 (hereinafter referred to as Rules, 1957 ). It was inserted by Wealth Tax (Amendment) Rules, 1979 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed only with Part A and B thereof. Part A basically contains Rule 2 defining several words for the purpose of Schedule III and the relevant provisions i.e 3 to 8 for valuation of immovable property are in Part B. For our purposes, Rules 3, 6 8 are relevant and the same are reproduced as under: 3. Subject to the provisions of rules 4, 5, 6, 7 and 8, for the purposes of sub-section (1) of section 7, the value of any immovable property, being building or land appurtenant thereto, or part thereof, shall be the amount arrived at by multiplying the net maintainable rent by the figure 12.5 : Provided that in relation to any such property which is constructed on leasehold land, this rule shall have effect as if for the figure 12.5, :─ (a) Where the unexpired period of the lease of such land is fifty years or more, the figure 10.0 had been substituted: and (b) Where the unexpired period of the lease of such land is less than fifty years, the figure 8.0 had been substituted: Provided Further that where such property is acquired or construction of which is completed after the 31st day of March, 1974, if the value so arrived at is lower than the cost of acq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gra, Ahmedabad, Allahabad, Amritsar, Bangalore, Bhopal, Cochin, Hyderabad, Indore, Jabalpur, Jamshedpur, Kanpur, Lucknow, Ludhiana, Madurai, Nagpur, Patna, Pune, Salem, Sholapur, Surat, Tiruchirapalli, Trivandrum, Vadodara (Baroda) or Varanasi (Benaras), Sixty-five percent of the aggregate area; and (iii) where the property is situate at any other place, seventy percent of the aggregate area: Provided that where, under any law for the time being in force, the minimum area of the plot of land required to be kept as open space for the enjoyment of the property exceeds the specified area, such minimum area shall be deemed to be the specified area: (c) unbuilt area , in relation to the aggregate area of the plot of land on which the property is constructed, means that part of such aggregate area on which no building has been erected. 8. Nothing contained in rule 3 shall apply ─ (a) Where, having regard to the facts and circumstances of the case, the Assessing Officer, with the previous approval of the Deputy Commissioner, is of opinion that it is not practicable to apply the provisions of the said rule to such a case: or (b) Where the differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee under section 14 or, section 15, or where the asset is not disclosed or the value of the asset is not declared in such return or where no such return has been made, the Valuation Officer shall serve a notice on the assessee intimating the value which he proposes to estimate and giving the assessee an opportunity to state, on a date to be specified int he notice, his objections either in person or in writing before the Valuation Officer and to produce or cause to be produced on that date such evidence as the assessee may rely in support of his objections. (5) On the date specified in the notice under sub-section (4), or as soon thereafter as may be, after hearing such evidence as the assessee may produce and after considering such evidence as the Valuation officer may require on any specified points and after taking into account all relevant material which he has gathered, the Valuation Officer shall, by order in writing, estimate the value of the asset and send a copy of his order to the Wealth Tax Officer and to the assessee. (6) On receipt of the order under sub-section (3) or sub - section (5) from the Valuation Officer, the [Assessing Officer] shall, so fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with effect from 1.4.1979 in the Rules, 1957 provided a formula for determination of fair market value of a house used wholly or mainly for the purpose of residence. The necessity to provide such formula was realized by the authorities concerned so that determination of market value of a house may not take a longer time and there should be some uniformity in such determination which will help in speedy disposal of the matters involving question of valuation of asset and also there will be lesser scope of variation in such assessment. When a rule sets out a method or formula for determining market value of any particular asset, Court held that it can be said to be a procedural provision and not substantive one. Such rule does not have the effect of impairing or creating any obligation and therefore, it is not substantive in character. 32. This decision was followed by Gujrat High Court in CWT v. Niranjan Narottam (1988) 173 ITR 693. Similar view was taken by Karnataka High Court in CWT v. Vidyavathi Kanpur (1984) 150 ITR 319 (Kant); Madhya Pradesh High Court in CWT v.Lachmandas Bhatia (1987) 163 ITR 586 (MP); Delhi High Court in CWT v.O.P.Tandon (1992) 195 ITR 688; Calcutta High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and, 68 of Jaipur Development Authority Act 1982 (hereinafter referred to as 'JDA Act, 1982'). Section 96 of JDA Act, 1982 confers power to frame Regulations. Section 68 authorizes Development Authority to charge fee for license or permission need be given under the Act or for the purposes of the Act. Section 32 authorizes Development Authority to remove an unauthorized development and lays down procedure which had to be followed before such removal. 37. JDA Act, 1982 was enacted by State Legislature of Rajasthan for establishment an Authority for the purposes of planning, co-ordinating and supervising the proper, orderly and rapid development of Jaipur Region, and, for executing plans, projects and schemes for such development and to provide for connected matters. 38. Section 21 talks of a Master Development Plan for Jaipur Region. It is supposed to define quality of life that a citizen of Jaipur Region could desirably be expected to lead in medium range perspective of the year 1991 and long term perspective of the year 2001 and thereafter such other intermediate stages, as the State Government may direct. Section 22 talks of Zonal Development Plan . 39. Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her safety measures shall be such as provided in Regulations 9 to 12. Thereafter Regulations 9 and 10 prohibits different standards for the purposes of constructions of buildings externally and internally, including designs, safety measures etc. Regulation 13 says that for the purpose of permission of competent authority, written application would be required. Regulation 14 provides procedure for permission. Regulation 15 lays down certain procedure to be observed by the person concerned who undertakes construction as per permission granted or in accordance with the standards set out in Regulations 1996. Regulation 16 talks of domicile certificate and Regulation 17 is a penal provision. Regulation 18 talks of regularization in respect to certain alternatives not consistent with standards set out in Regulations 9 to 10 but may be compounded in certain circumstances. Regulation 20 repeals earlier Regulations i.e JDA (Building Regulations) 1989, as amended from time to time. 42. Regulations 1996, therefore, is a delegated legislation enacted by Rajasthan Government, controlling and regulating building activities in Jaipur Region. Neither, Regulations 1989 nor Regulations 1996 provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw irrespective of its purpose and object or it has some specific application and meaning. 49. We have no manner of doubt that the real intention of legislature has to be considered in the context of the purpose a provision has been made. In wider sense, the phrase law for the time being in force mentioned in Rule 6 Explanation (b) (iii) proviso to Schedule III may include Regulations 1996 within its ambit, provided activities of construction of building would have been governed or required to conform with the standards etc. set out in Regulations 1996. That is not the claim of Assessee at all. It is not stated before us also that Regulations 1996 had to be complied with by Assessee for the purposes of designing, constructions, security and safety arrangement etc. of disputed property. It is also not disputed that any further development would have to conform with Regulations framed under JDA Act 1982 in respect to disputed property, if proposed by Assessee but the existing property, in the manner it was on the date relevant for assessment, the said Regulation did not require any such observance. Reasons are quite obvious. The disputed property is an old construction. There w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ea of plot of land must be maintained as open space exceeding the specified area, particular area of open space then for the purpose of Rule 6 Explanation (b)(iii), instead of 70% of aggregate area, such minimum area as specified in such law for the time being in force, shall be deemed to be the specified area, the Specified Area obviously refers to a substantive provision of law regulating construction, development etc. and will bring within its ambit Regulations 1986 but mere reference to such Regulations will not make Regulations 1996, rules of evidence and procedural in nature for the reason that these Regulations on their own, substantive provisions. Regulations did neither affected existing rights of any person nor created an obligations which one has to observe, if it opts to proceed for development by way of construction of a building in the area where Regulations 1996 are applicable. For mere reference in Rule 6, Regulations 1996 which are otherwise substantive, cannot be taken to be procedural in nature and therefore, cannot be made applicable to the pending matters. In fact, these Regulations would be applicable only where asset in question has been developed under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deal with the application of substantive law to particular cases and it goes without saying that the Law of Evidence is a part of the law of procedure. 57. It is also well established that procedural law, generally speaking, is applicable to pending cases, since no suitor can be said to have a vested right in procedure. There may be a provision which can be partly substantive and partly procedural but the factum that a particular provision, if substantive, if referred in another law, the referred law will not ipso facto become procedural but will have to be examined on its own whether it is a substantive or procedural law. 58. In the matter of taxation, unless things are is very clear, no attempt shall be made to make a provision retrospective, if it is otherwise. Regulations 1996 neither explanatory nor clarificatory nor provides any machinery for assessment or valuation etc. but containing a substantive provisions made by delegated legislation under J.D.A. Act, 1982 to regulate construction and development activities in Jaipur Region. The persons in Jaipur Region are obliged to follow and observe those provisions and if violate, are liable to be punished since a viol ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
