M.J. Vijayapadman vs Commissioner of Wealth Tax

K.S. Paripoornan, J.—These two references arise under the Wealth-tax Act, 1957. At the instance of the assessee, the Income Tax Appellate Tribunal has referred the following question of law for the decision of this court:

"Whether, on the facts and in the circumstances of the case, the proceedings u/s 35 of the Wealth-tax Act, 1957, were valid in law?"

The respondent is the Revenue. We are concerned with the assessment years 1974-75 and 1975-76. For wealth-tax purposes, the relevant valuation dates are March 31, 1974, and March 31, 1975. The original assessments made under the Wealth-tax Act against the assessee were rectified on the ground that a mistake had crept in the orders. Proceedings were passed u/s 35 of the Wealth-tax Act for both the years dated March 11, 1982. In appeals, the Appellate Assistant Commissioner held that there is no mistake apparent from the records to be rectified u/s 35 of the Wealth-tax Act. In further appeal preferred by the Revenue, the Income Tax Appellate Tribunal, by a common order dated December 27, 1984, held that it is clear that there is a mistake apparent from the records and so Section 35 is attracted. It is thereafter at the instance of the assessee that the question of law, formulated hereinabove, has been referred for the decision of this court by the Income Tax Appellate Tribunal.

We heard counsel. It was argued that the sum of Rs. 1 lakh to be paid to the assessee after the expiry of five years as per the will of Mr. M. K. Jinachandran will be an asset, if at all, only on or after January 30, 1975, and so the said sum could not have been included for the purpose of wealth-tax assessment on the valuation date, March 31. 1974. It was further argued that, for the year ending on March 31, 1975, there was only a right to get the said amount and it was not an asset. After construing the relevant clauses in the will of Mr. M. K. Jinachandran, the Appellate Tribunal held that there is no debatability as to the assessee''s right to receive Rs. 1 lakh from Chandraprabha Charitable Trust out of its income. It is further held that it is clear that there is a mistake apparent from the records. The proceedings u/s 35 were justified.

It is clear from the question referred to this court that the assessee has not questioned the finding entered by the Appellate Tribunal to the effect that there is a mistake apparent from the records. We have to understand the question referred to us as stating, "whether, in the light of the finding of the Appellate Tribunal that there is a mistake apparent from the records, the proceedings u/s 35 of the Wealth-tax Act, 1957, were valid in law ?" In so far as the finding of fact made by the Appellate Tribunal that there is a mistake apparent from the records is not challenged, the only further question is whether, on the findings recorded, the conclusion of the Appellate Tribunal is valid in law. On that, there can be no doubt that if there is a mistake apparent on the records, Section 35 was validly invoked. In the circumstances, we have to answer the question in the affirmative, against the assessee and in favour of the Revenue.

Both the references are answered against the assessee and in favour of the Revenue.

A copy of this judgment under the seal of this court and the signature of the Registrar will be forwarded to the Income Tax Appellate Tribunal, Cochin Bench.