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TMI Blog1973 (9) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ertain pieces of their land should not be included in the computation of the net welath, they being agricultural land. That claim having been rejected by the Wealth-tax Officer, the assessees went in appeal before the Appellate Assistant Commissioner under section 23 of the Wealth-tax Act. The Appellate Assistant Commissioner accepted the claim and allowed the appeal. The Wealth-tax Officer, therefore, took the matters in further appeal before the Tribunal where in the course of hearing of the appeals, a contention was raised on behalf of the revenue, though not urged in the grounds of the memo of appeals, that as no notice of the date of effective hearing of the appeals was given to the Wealth-tax Officer, the order of the Appellate Assistant Commissioner was bad in law. This contention found favour with the Tribunal, as it was of the opinion that the Wealth-tax Officer being a party to the proceedings, should have been afforded an opportunity of being heard by service of the notice of the date of effective hearing, since such right is implicit in the scheme of the Wealth-tax Act or in any case on principles of natural justice and fair play because the Appellate Assistant Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upreme Court, after approving the decision of the Bombay High Court in Narrondas Manordass v. Commissioner of Income-tax, regarding the width and scope of the power of the Appellate Assistant Commissioner under section 31(3), observed as under : "It is necessary to bear in mind, in this connection, that it is only the assessee who has a right conferred under section 31 to prefer an appeal against the order of assessment made by the Income-tax Officer. If the assessee does not choose to appeal, the order of assessment becomes final subject to any power of revision that the Commissioner may have under section 33B of the Act. Therefore, it would be wholly erroneous to compare the Powers of the Appellate Assistant Commissioner with the powers possessed by a court of appeal under the Civil Procedure Code (underlining is ours). The Appellate Assistant Commissioner is not an ordinary court of appeal. It is impossible to talk of a court of appeal when only one party to the original decision is entitled to appeal and not the other party, and in view of this peculiar position the statute has conferred very wide powers upon the Appellate Assistant Commissioner once an appeal is preferred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cludes any subjective or arbitrary decision by the Income-tax Officer ; but the power so exercised is not clothed with finality and is not excluded from review by the Appellate Assistant Commissioner and in reviewing the order the appellate authority can exercise the same powers which the Income-tax Officer could exercise." The Supreme Court referred to the decision of the Bombay High Court in Narrondas Manordass's case, where the Bombay High Court has considered the scope of the powers of the Appellate Assistant Commissioner under section 31(3). In Narrondas Manordass's case 3 the Bombay High Court has observed is under : "Now, in order to understand what the competence of the Appellate Assistant Commissioner is and what are the powers conferred upon the Appellate Assistant Commissioner, it is necessary to bear in mind certain salient facts. It is only the assessee who has a right conferred upon him to prefer an appeal against the order of assessment passed by the Income-tax Officer. If the assessee does not choose to appeal, the order of assessment becomes final subject to any power of revision that the Commissioner might have under section 33B of the Income-tax Act. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er's powers are not confined to consider only these points about which the assessee has a grievance but he may consider those points about which the assessee is satisfied and order the enhancement of the assessment." In S. N. Swarnammal v. Controller of Estate Duty, the Madras High Court while dealing with the question referred to it under the Estate Duty Act as to whether the Board of Revenue acted within their powers when they declined to admit the fresh contentions raised at the time of hearing of the appeal before them, Mr. Justice Ramanujam, speaking for the court, observed as under : "It is well established that an appeal before the Appellate Assistant Commissioner or before the Tribunal is a rehearing, and the appellate authority has got all the powers of the assessing authority." Similarly, in Commissioner of Income-tax v. Kanpur Coal Syndicate, the court in the context of the question-whether when, the Income-tax Officer in his discretion assessed an association of persons to income-tax, the Appellate Assistant Commissioner in appeal or the Income-tax Appellate Tribunal in further appeal can set aside that order and direct him to assess the members of that associatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia. It should be noted that the Indian legislature has followed the scheme of the British Act with slight modification as to the nomenclature of the authorities and difference in power here and there. The role of the Appellate Assistant Commissioner has been considered by different Commissions. In the Report of the Taxation Enquiry Commission (1953-54), volume II, while dealing with the role of the Appellate Assistant Commissioner, the Commission has observed in paragraph 70 at page 236 as under: "We are, therefore, of the opinion that, all things considered, the balance of advantage lies in leaving the existing structure unchanged. The demand for transferring the Appellate Assistant Commissioners away from the control of the Central Board of Revenue arises, in our opinion, from lack of a proper appreciation of the crucial fact that the assessment proceedings before the Income-tax Officer are not of the nature of judicial proceedings and that the Appellate Assistant Commissioner, socalled, is in essence not, and was never meant to be, anything more than a reviewing and revising departmental authority within the income-tax department. The Appellate Assistant Commissioners go thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir contentions. It has been urged on behalf of the assessees that the entire approach of the Tribunal labours under a misapprehension as to the real role of the Appellate Assistant Commissioner and his powers while exercising the appellate, jurisdiction. It was contended on behalf of the assessee that it is a misnomer to call the proceedings before the Appellate Assistant Commissioner an appeal in the sense in which it is understood in civil courts. It is merely a rehearing and reappraising of the assessment already made by the Income-tax Officer. It was contended that a dispute between a taxpayer and the State is not a dispute between a taxpayer and the Income-tax Officer. The Income-tax Officer is not a party in the sense in which we understand it in civil courts. The powers of the Appellate Assistant Commissioner being plenary powers of appeal are conterminous with the powers of the Income-tax Officer and he is also, as the Income-tax Officer is, a party and a judge, though in appeal he is re-considering and revising the assessment already made. On behalf of the revenue, these contentions were contested. It was urged on behalf of the revenue that the correct role of the Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orts set out hereinabove. The courts have considered as a well-established legal position that the Appellate Assistant Commissioner is not a civil court as we understand under the Civil Procedure Code, or for that matter a court of appeal under the Civil Procedure Code. It is no doubt true, as contended by the learned counsel on behalf of the revenue, that there are limitations on the powers of this appellate authority, namely, that he cannot travel beyond the returns of the assessee or the record of the assessment proceedings, as they are before the Income-tax Officer, while exercising his appellate jurisdiction as an appellate authority for purposes, of enhancing assessment. But none the less he is not in the position of a judge deciding a dispute. He is an appellate as well as a revising authority and his powers are much wider than the powers of an appellate court under the Civil Procedure Code or the Criminal Procedure Code. He can, subject, to the limitations stated above, do whatever the Income-tax Officer could have done and his appellate powers are plenary powers including the power of reassessment. The Tribunal was, therefore, not right when it observed that the Wealth-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Commissioner to direct the Income-tax Officer to file an appeal on his behalf, but that right which the assessing officer has, is got under a specific provision of the relevant Act. From that provision, we do not think it can be justifiably urged that the assessing officer is a party before the Appellate Assistant Commissioner nor can it be urged that, therefore, consequently, he has a right of being heard as a matter of course before the Appellate Assistant Commissioner. In our opinion, if such a right was intended to be conferred on the assessing officer, the legislature could have certainly made a suitable provision in the Act concerned. The very absence of such a provision under the Wealth-tax Act indicates that, though the legislature was aware of similar provisions under the Indian Income-tax Act, Excess Profits Tax Act and the Business Profits Tax Act, which were put on the statute book prior to the Wealth-tax Act, and when such a provision was incorporated in the Income-tax Act of 1961, which was placed on the statute book after the Wealth-tax Act, the legislature, however, did not think it fit to make an express provision confirming such a provision of service of notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng heard. As we have stated above, the Wealth-tax Officer would not, for all purposes and at all stages, represent the revenue and unless that right of representing the revenue is conferred by a specific provision in the Act, we do not think that it can be said that he has a right of being heard as a matter of course under the Wealth-tax Act. We do not intend to suggest hereby that, if there is a practice in the department that a notice of lodging of an appeal or a notice of hearing of the appeal is given to the Wealth-tax Officer, it should be discouraged or discontinued. We also do not intend to say that the Appellate Assistant Commissioner, whenever he feels it necessary to hear the Wealth-tax Officer, should not do it. It should also be noted that sub-section (3)(a) of section 23 of the Wealth-tax Act has been brought on the statute book by the Taxation Laws Amendment Act, 1972, whereby the Appellate Assistant Commissioner has been placed under an obligation in an appeal, where the valuation of an estate is objected to, to ear the Valuation Officer who has made the valuation under section 16A, or in any other case, on a request being made in this behalf by the Wealth-tax Office ..... X X X X Extracts X X X X X X X X Extracts X X X X
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