R.N. Goenka vs Commissioner of Wealth-tax

Srinivasan, J.—The question which is raised in these petitions is as follows :

Whether, on the facts and in the circumstances of the case, the Income Tax refunds which became due after the valuation date constitute an asset

chargeable to wealth-tax ?

The Tribunal has decided against the assessee, relying upon the ruling of this court in T.V. Srinivasan Vs. Commissioner of Wealth-tax, .

Learned counsel for the petitioner submits that the said decision of this court requires to be reconsidered inasmuch as the Division Bench had not

considered the question as to how, on the valuation date, the advance tax already paid by the assessee under the Income Tax Act could be

considered to be his asset. It was held in that case that the entire advance tax paid will be an asset of the assessee and the entire accrued Income

Tax liability for the relevant accounting year will be a debt owed by the assessee to the Government with the result that the excess advance tax

paid will continue to have the character of an asset of the assessee.

On the other hand, learned counsel for the Revenue contends that there is no error in the order of the Tribunal as it has applied the law laid

down by this court in T.V. Srinivasan Vs. Commissioner of Wealth-tax, . According to learned counsel for the Revenue, the matter has been fully

and exhaustively considered by the Division Bench in that case. Learned counsel for the Revenue our attention to the decision in Commissioner of

Income Tax Vs. Carborandum Universal Ltd., , wherein it was held that the discretion u/s 256(2) of the Income Tax Act, 1961, could be

exercised by the High Court only if it was not satisfied about the correctness of the decision of the Tribunal is wholly in accordance with the law

laid down by the High Court, it could not be required to state a case and refer the question of law. That reasoning was agreed with by the Kerala

High Court in COMMISSIONER OF Income Tax Vs. K. S. R. T. C. PENSION AND GRATUITY FUND TRUST., . Learned counsel for the

Revenue also places reliance on the decision in Sundaram Industries Ltd. Vs. Commissioner of Income Tax, . In that case, it was held that in the

matter of construction of an Indian statute, as far as possible, there must be uniformity of construction and if the provisions of law which fall for

construction before the court had already been construed by another High Court or High Courts, unless there are compelling reasons to depart

from the view, normally, that construction should be accepted.

The principle enunciated in Commissioner of Income Tax Vs. Carborandum Universal Ltd., And Sundaram Industries Ltd. Vs. Commissioner

of Income Tax, , could come into play only when there is no reason whatever to depart from the view taken already. If the High Court finds in any

particular matter that the view taken in an earlier decision requires reconsideration, then the only course open to the High Court is to direct the

Tribunal to make a reference. Otherwise, it will lead to a situation where a decision once rendered will be conclusive and binding for ever, unless

reversed or overruled by the Supreme Court. It is always open to a Division Bench of this court to refer the matter to a larger Bench when it finds

it necessary to differ from an earlier decision of a Division Bench.

We find that there is considerable force in the argument advanced by learned counsel for the assessee that the Division Bench in T.V. Srinivasan

Vs. Commissioner of Wealth-tax, has omitted to consider the vital matter as to how, on the relevant valuation date, the excess advance tax which

could be ascertained only after the completion of the assessment, which would naturally be only after the relevant valuation date, could relate back

to the valuation date and such excess tax could be considered to be an asset of the assessee on the date of valuation. Hence, we are of the opinion

that the decision of the aforesaid Division Bench of this court requires to be reconsidered. Thus, we are satisfied that the question of law raised in

the petition needs to be referred to this court for consideration and that the petition raise a referable question of law.

Hence, we direct the Tribunal to forward to this court a statement of the case referring the question of law set out at the commencement of this

order.