Commissioner of Wealth Tax vs Begam Brigees Zahoor Qasim and Others

Arijit Pasayat, C.J.—This order will govern WTRs Nos. 83 to 86 of 1978 arising out of WTAs Nos. 1467 to 1470 of 1975-76, WTRs Nos. 148 to 152 of 1982 arising out of WTAs Nos. 1003 to 1006/D of 1980 and 1009/D of ,1980, WTR No. 45 of 1983 arising out of WTA No. 53/Delhi of 1981, WTR No. 84 of 1983 arising out of WTA No. 120/Delhi of 1991, WTR No. 85 of 1983 arising out of WTA No. 51/Delhi of 1981, WTR No. 92 of 1983 arising out of WTA No. 52/Delhi of 1981 and WTR No. 93 of 1983 arising out of WTA No. 54/Delhi of 1981.

At the instance of the Revenue, u/s 27(1) of the Wealth-tax Act, 1957, the Income Tax Appellate Tribunal (in short "the Tribunal"), has referred the following question, pertaining to the assessment year 1974-75, in WTRs Nos. 83 to 86 of 1978, for the opinion of this court:

"Whether, on the facts and in the circumstances of the case, the Tribunal was correct in confirming the orders of the Appellate Assistant Commissioner holding that the Wealth-tax Officer was not correct in including a sum of Rs. 2,87,460 as the wealth of the assessed representing their shares of right in the property left by their father, the late Nawab of Rampur ?"

In other references, except that the figure of wealth included is different, essentially the issues are the same. Taking note of Suit No. 219 of 1972 titled Saiyid Sirajul Hasan v. Syed Murtaza Ali Khan and Ors. filed in this court, as a protective measure the concerned sum was included while computing net wealth for the concerned assessment year 1974-75 u/s 16(3) of the Act. Such inclusion was challenged by the concerned assessed before the Appellate Assistant Commissioner of Wealth-tax ("the AAC"). The said authority was of the view that though protective inclusion can be made, it is permissible only when a substantive assessment is made in the case of another person. As there was no material to show that such inclusion was made on substantive basis in the hands of any other person, the inclusion on protective basis was upset by the Appellate Assistant Commissioner. The Revenue carried the matter in appeals before the Tribunal which in turn upheld the views of the Appellate Assistant Commissioner. On being moved, the above references have been made.

We have heard Mr. Sanjiv Khanna, learned counsel for the Revenue. There is no appearance on behalf of the assessed in spite of service of notices.

As has been rightly observed by the Appellate Assistant Commissioner protective inclusion of wealth is permissible where a substantive assessment is made in the hands of another. There was no definite finding recorded by the Appellate Assistant Commissioner or the Tribunal as to whether there was any substantive inclusion in the hands of any other person so far as the wealth in question is concerned. In case it has been so done, obviously protective assessment could have been made as was done by the Wealth-tax Officer. As the material facts are not borne out from the orders, we think it appropriate to remand the matter back to the Tribunal, instead of answering the questions referred, for hearing the matter afresh and to find out whether there has been inclusion of the concerned properties in the hands of any other person. If that has been done protective assessment shall be continued. It is fairly conceded in view of the settled position of law, that for a property which is included on protective basis, corresponding tax element cannot be recovered.

The references are, accordingly, disposed of.