COMMISSIONER OF WEALTH TAX Vs. LABH KAVAR BAI

JUDGEMENT

(1.) PURSUANT to the directions given by this Court, in TCP No. 417/79 dt. 14th September, 1980, the Tribunal has referred the following question for our opinion under s. 27(3) of the WT Act (hereinafter referred to as the Act) :

(2.) IN the asst. yr. 1972-73, the WTO in his order dt. 31st May, 1975 under s. 35 of the Act, added a sum of Rs. 45,700 as a liability due by the assessee to the Life INsurance Corporation, omitted to be disallowed in the original assessment made on 20th February, 1973 wherein such liability has been allowed as a deduction. According to the WTO, rectification is possible, since the liability in question being secured and (sic-against) the life insurance policies in respect of which no wealth tax was chargeable, had been wrongly allowed and the mistake had been discovered on a perusal of the evidence available on record. The AAC, on appeal, confirmed the order of the WTO, as, according to him, there was a clear mistake of patent omission to add back an obviously disallowed item and as such, there could not be a debate. The aggrieved assessee filed a further second appeal before the Tribunal. The Tribunal was of the view that the interpretation of s. 2(m)(ii) of the Act had been the subject-matter of consideration by the Benches of the Tribunal on several occasion. IN ITA No. 523/Mad/75-76, the A Bench by its order dt. 22nd January, 1976 has allowed a similar contention of the Department and, in fact, the question has been referred to the High Court as there was a question of law. Another view was also taken by the Tribunal that the liability will be allowed [vide the decision - Gulanikar's 2 Acts Gift & Wealth-tax (1976) Edn. pp. 73-74 WTA No. 122/Ahd/70-71 for asst. yr. 1968-69 reported in 1973 Tax (3) 128]. Since two views are possible, as is evident from the above said orders of the Tribunal and the matter invoking a question of law and had been referred to the High Court, the Tribunal was of the view that s. 35 cannot be brought into application. According to the Tribunal, the interpretation of s. 2(m)(ii) involves a long drawn out arguments and, therefore, s. 35 which can be applied to correct mistakes apparent from the record, cannot be invoked. Accordingly, the Tribunal allowed the assessee's appeal.