COMMISSIONER OF WEALTH TAX Vs. R B PATEL

JUDGEMENT

(1.) These two reference applications invoke an identical question, pertaining to assessment years 1968-69 and 1969-70, which has been referred under Section 27(1) of the Wealth Act, 1957 (for short the Act) by the Income-tax Appellate Tribunal, Delhi Bench-E, (for short the Tribunal) for opinion of this Court:

(2.) Since answer to the question would depend upon the scope and ambit of Section 35 of the Act, a detailed reference to the factual position is unnecessary. In brief, it is as follows: Assessments were originally completed for the two assessment years. When such assessments were taken up, the assessee claimed exemption in respect of jewellery valued at Rs. 2,90,025/- Assessing Officer accepted the assessee's claim and value of jewellery was not included in the net wealth. Subsequently, by Finance (No.2) Act, 1971, an amendment was made to Section 5(1) (viii) making jewellery liable to Wealth-tax. Two explanations were added to this amended Section 5(1) (viii), enlarging the scope of interpretation of the word 'jewellery'. The explanations were made operative with effect from 1st April, 1972. Referring to the amendment, the Wealth-tax officer was of the view that non-inclusion of value of jewellery in the original assessments was a mistake apparent from the record. Proceedings were initiated under Section 35 of the Act and orders were passed including value of jewellery in the net wealth of the assessee. Appeals were filed before the Appellate Assistant Commissioner (for short the AAC). It was contended by the assessee before him that there is no, scope for bringing in application of Section 35 of the Act. The assessee's plea was accepted by, the AAC. In appeal by the revenue, the order of the AAC was sustained by the Tribunal. It was held that the question was a debatable one as to whether the amending provisions applied to a concluded assessment against which no further proceedings are pending on the date of enactment of amending provision and, therefore, Section 35 had no application to the case. On being moved for reference, the prayer was accepted by the Tribunal.

(3.) Heard learned counsel for the Revenue. There is no appearance on behalf of the assessee in spite of service of notice.