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TMI Blog2004 (2) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... ABARTI., S. K. GUPTA. JUDGMENT Aloke Chakrabarti J.- This appeal was heard along with M.A.T. No. 2847 of 2003, M.A.T. No. 2848 of 2003 and M.A.T. No. 2849 of 2003. The judgment impugned in the present appeal was passed in C.R. No. 2681 of (W) 1989 dated August 26, 2003. For the reasons given in the said judgment the other three writ petitions being C.R. No. 2680 (W) of 1984, C.R. No. 2679 (W) of 1984 and C.R. No. 2682 (W) of 1984 were also decided. Being aggrieved these four appeals were preferred by the assessee. The appellant as karta of a Hindu undivided family known as Sri Raghupati Singhania (HUF) was a partner in the firm, M/s. Juggilal Kamlapat Banker, as also of M/s. Singhania and Sons (hereinafter referred to as the said "firms"). In respect of the net wealth of the said family, return was filed on October 3, 1977, in respect of the assessment year 1977-78 under the Wealth-tax Act, before the Wealth-tax Officer, Special Circle "C" Ward, Kanpur. In the said return the family duly disclosed the value of the interest in the said partnership firms. By an order of assessment dated March 27, 2002, under section 16(3) of the Wealth-tax Act, the assessment was made and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revise. Judgment have been also referred to as decided in the case of Malabar Industrial Co. Ltd. v. CIT reported in [2000] 243 ITR 83 (SC). On behalf of the respondent, it is strongly contended that not only the Commissioner had the power to issue the impugned notice in the facts and circumstances of the present case but that subsequent to the dismissal of the writ petition the assessment order has already been passed completing the proceeding initiated by the impugned notice and, therefore, the assessee is having the remedy of appeal against the said assessment order finally passed by the statutory authority and he not having availed of the remedy provided in such appeals, his present appeal cannot be considered as the proceeding itself was against the notice only. For consideration of the said contentions, we are first taking up the argument as regards the jurisdiction of the Commissioner in issuing the notice and initiation of a proceeding under section 25(2) of the Act before considering the main contention on the merits. In our consideration the language of the statute appears to be relevant and the provisions contained in section 25 is set out hereunder: 25. "Powers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment or cancelling it and directing a fresh assessment. (3) No order shall be made under sub-section (2) after the expiry of two years from the date of the order sought to be revised. (4) Notwithstanding anything contained in sub-section (3), an order in revision under sub-section (2) may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, the High Court or the Supreme Court. Explanation.- In computing the period of limitation for the purposes of sub-section (3), the time taken in giving an opportunity to the assessee to be re-heard under the proviso to section 39 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded." Therefore, the language of sub-section (2) of section 25 shows that the revisional power can be exercised by the Commissioner, if he considers that any order passed by the Wealth-tax Officer "is erroneous in so far as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of unquoted shares of a company. However, inasmuch as rule 2 does not require the net wealth of a firm to be calculated as laid down in the Act or the Rules, the market value of the shares could not have been calculated in accordance with rule 1D. The shares had to be valued at their cost price in accordance with settled commercial principles. This being so, the firm could value the shares in M/s. Indofil Chemicals Ltd. at their cost price. The assessee had shown the value of his interest in the firm on the basis of the valuation adopted by the firm, which was based on the commercial method of accountancy. The only ground given by the Wealth-tax Officer for forming the belief that net wealth had escaped assessment is that the valuation of the shares of M/s. Indofil Chemicals Ltd. held by the firm, of which the assessee was a partner, had not been calculated in accordance with rule 1D, with the result that they have been undervalued. But on the view expressed earlier that the net wealth of the firm has to be calculated not in accordance with the Act or Rules, but on the principles of commercial accountancy, the belief which the Wealth-tax Officer entertained that the net wealth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said view the revisional power under section 25(2) could not be exercised as the other view cannot be held to be totally erroneous nor the order could be treated as erroneous order prejudicial to the interests of the Revenue. In the above view of the matter, we are of the opinion that the power of revision under section 25(2) of the Wealth-tax Act could not be exercised in the facts and circumstances of the case and accordingly the notice and the proceeding following it cannot stand. As we have taken the above view in respect of the notice itself, we feel the contentions on the merits need not be decided by this court. With regard to the contentions of the respondent that the proceeding which was initiated on the basis of the impugned notice, having been already completed the present appeal should not be heard as the assessee is having redress in the forum of appeal against the assessment order, we find that the impugned notice was issued long back in the year 1984 and the notice was dated March 14/15, 1984, fixing March 20, 1984, as the date for showing cause. The assessee obtained an interim order staying the proceeding on March 19, 1984, by moving the present writ petit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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