MUTTOO R H Vs. KASTURBAI WALCHAND MRS

JUDGEMENT

(1.) THIS appeal has been preferred by the appellants Commissioner of Wealth -tax, Bombay City I, Bombay) against the judgment and order of Thakkar J. dated October 10, 11, 1966, in Miscellaneous Petition No. 42 of 1965, whereby the learned judge set aside the order of the Commissioner dated August 12, 1964, refusing to entertain the revisional application of the respondent and further directing the Commissioner to dispose of the said revisional application in accordance with law.

(2.) THE facts giving rise to the appeal may be stated : The respondent (who was the petitioner in Miscellaneous Petition No. 42 of 1965) was the holder of 149 shares in Walchand and Co. Pvt. Ltd. During the relevant years 1958 -59, 1959 -60 and 1960 -61, and March 31, 1960, the respondent adopted the valuation of the said shares at their break -up values with paid -up capital and reserves, as there was no market quotation for the same. The Wealth -tax Officer, Company Circle I (3), Bombay, by his separate orders for the aforesaid years rejected the valuation of the said shares as claimed by the respondent and estimated their values on the basis of capitalisation of profits at 6% for the assessment year 1960 -61 and on the basis of break -up value with certain modifications for the assessment years 1958 -59 and 1959 -60. The respondent, feeling preferred appeals to the Appellate Assistant Commissioner of Wealth -tax and the Appellate Assistant Commissioner determined the values of the said shares on the basis of capitalisation of the investment income at 6% and of other income at 12 1/2%, with the result that he partly allowed the appeals of the respondent by his separate orders passed in three appeals dated November 10, 1961. Feeling aggrieved by the said orders of the Appellate Assistant Commissioner, the Wealth -tax Officer preferred appeals to the Income -tax Appellate Tribunal. The respondent did not prefer any appeal to the Tribunal. The Tribunal, by its consolidated order for the assessment years 1958 -59, 1959 -60 and 1960 -61 and a separate order in respect of the assessment for the year 1957 -58, dismissed all the appeals preferred by the Wealth -tax Officer. In other words, the enhanced valuation sought by the Wealth -tax Officer was rejected by the Tribunal. In the course of its judgment, the Tribunal, inter alia, observed as follows :

(3.) IT was this order passed by the first appellant on August 12, 1964, that was challenged by the respondent in Miscellaneous Petition No. 42 of 1965, which he preferred on the original side of this court under article 226 of the Constitution. The said order was challenged on two grounds. In the first place, it was challenged on the ground that it had been passed in violation of principles of natural justice inasmuch as no opportunity was given to the respondent of being heard before the order was passed. Secondly, it was contended that on the basis of a wrong approach adopted by the Commissioner on the question of construction of the relevant proviso to section 25(1), the Commissioner had failed to exercise jurisdiction vested in him by law and as such there was clear error of law apparent on the face of the record justifying interference by this court.