Commissioner of Wealth Tax vs Shri Biju Patnaik

Madan B. Lokur, J.—It is rather unfortunate that this petition has remained pending admission for the last more than 20 years. Fortunately, however, the Registry of this Court has woken up and is now in the process of taking stock of the situation and radically improving its functioning.

The Revenue has filed this petition u/s 27(3) of the Wealth Tax Act, 1957 seeking reference of the following question of law for the opinion of this Court:

Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in upholding the order of the Commissioner of Wealth Tax (Appeals), deleting the addition of Rs. 93,50,584/- representing the value of the assets claimed to be owned by ''Kalinga Foundation Trust'', which was found by the Wealth Tax Officer to be not genuine and only a benami concern of the assessed?

The issue raised is whether Kalinga Foundation Trust was a genuine Trust or was only a benami concern of the assessed.

The Commissioner of Wealth Tax, relying upon earlier orders passed by him, held that M/s Kalinga Foundation Trust is not a benami concern of the assessed and by an order dated 15th January, 1986, Therefore, the addition made was deleted.

Feeling aggrieved, the Revenue preferred an appeal before the Income Tax Appellate Tribunal (the Tribunal) which relied upon orders passed by it in respect of earlier orders pertaining to the same assessed and by an order dated 15th January, 1986 affirmed its conclusion that the Trust was not a benami concern of the assessed.

Against the order passed by the Tribunal, the Revenue made an application u/s 27(1) of the Act seeking to refer a question of law for the consideration of this Court. The Tribunal relied upon earlier orders and declined to refer any question of law for the opinion of this Court. Under the circumstances, the Revenue is now before us.

It appears from the order passed by the Tribunal on 15th January, 1986 dismissing the appeal of the Revenue, that the Revenue had contended that the issue is presently lying with this Court under reference and that is why an appeal had been filed by the Revenue to keep the issue alive.

Learned Counsel for the assessed informs us that as far as he is aware, there is no reference pending in respect of the issue sought to be raised by the Revenue. He says that there may be some income tax cases pending but as far as he is aware, no case under the Wealth Tax Act is pending in respect of this assessed in this Court. Learned Counsel for the Revenue is unable to controvert this.

Learned Counsel for the assessed has also brought to our notice a decision of the Orissa High Court in Commissioner of Income Tax Vs. Biju Patnaik (Deced.) (by LR. Prem Patnaik), . We find from a perusal of the decision of the Orissa High Court that the question whether the Kalinga Foundation Trust is a benami concern of the Assessee had also arisen in the Orissa High Court. It appears that the Income Tax Officer had come to the conclusion that the Trust was a benami concern of the assessed but this conclusion was not accepted by the appellate authorities on the ground that the Assessing Officer had relied upon the statements of 14 witnesses who were not tendered for cross-examination by the assessed. It was also to be noted that none of these 14 witnesses are capable of being cross-examined now. The reason for this is that out of 14 witnesses 12 of them have since died. As regards the 13th witness, his whereabouts are not known. In so far as 14th witness is concerned, he is about 88 years of age, physically indisposed and hard of hearing and as such his cross-examination is not possible. This is so recorded in the decision in the Orissa High Court.

It appears to us, Therefore, that the Income Tax Department in Orissa was unable to satisfy the High Court whether Kalinga Foundation Trust was a benami concern of the assessed or not - and now it is too late because of supervening circumstances.

In so far as this Court is concerned, there is a decision of the Tribunal to the effect that Kalinga Foundation Trust is not a benami concern of the assessed and there is nothing to indicate that any reference is pending in this Court on this issue.

Taking all these facts in to consideration, we are of the view, as was the Orissa High Court, that the issue that has been raised has now become purely academic in view of the passage of time.

Under the circumstances, we dismiss this petition and decline to call for a reference from the Tribunal.