COMMISSIONER OF WEALTH TAX Vs. BALIAH S

JUDGEMENT

(1.) THIS is a reference under Section 27(1) of the Wealth-tax Act. The question involved in this reference is whether an appeal preferred under the Wealth-tax Act to the Tribunal can be heard by a single member of the Appellate Tribunal where the total income of the assessee is within the maximum prescribed in Section 255(3) of the Income-tax Act,

(2.) THE assessee is an individual. He was treated as a defaulter as he had not filed his return of net wealth in time, and after issuing a notice to him under Section 18(1)(a) of the Wealth-tax Act (hereinafter referred to as "the Act"), the Wealth-tax Officer levied a penalty of Rs. 2,380. On appeal, the Appellate Assistant Commissioner, while upholding the penalty, reduced the quantum to Rs. 475 only. That lead to the department's appeal to the Tribunal. THE income of the assessee during the relevant assessment year 1966-67 was less than Rs. 40,000 for income-tax purposes. THE appeal on that ground was taken up for hearing by a single member of the Tribunal constituting a Bench. A preliminary objection was taken by the representative of the department that a single member of the Tribunal cannot hear the appeal taking the income of the assessee as the basis. That objection was overruled by the Tribunal and hence this reference at the instance of the Commissioner of Wealth-tax, Hyderabad.

(3.) THIS single member Bench of the Appellate Tribunal in holding that a single member Bench can hear an appeal under the Wealth-tax Act, where the total income of the assessee is less than the maximum prescribed in Section 255(3) of the Income-tax Act, relied upon Sub-sections (2) and (3) thereof. The application of Sub-sections (2) and (3) of Section 255 of the Income-tax Act is excluded by Sub-section (11) of Section 24 of the Act. Therefore, the provisions that apply in so far as the powers and functions of the Appellate Tribunal are concerned, where a case is referred under the Wealth-tax Act are Sub-sections (1), (4) and (5) of Section 255 of the Income-tax Act. The object of constituting an Appellate Tribunal is to have in it a judicial member and an accountant member. The constitution of the Benches is left to the discretion of the President of the Appellate Tribunal from among the members thereof. Sub-section (3) relied upon by the Tribunal empowers the President or any other member of the Appellate Tribunal who sits singly to dispose of any case which has been allotted to the Bench of which he is a member and which pertains to an assessee whose total income as computed by the Income-tax Officer in that case does not exceed Rs. 40,000. It is a legislative injunction that a Bench of the Appellate Tribunal shall consist of one judicial member and one accountant member and Sub-section (3) is an exception to Sub-section (2). It is not open to the President or any member of a Bench of an Appellate Tribunal to sit singly and dispose of a case under the Income-tax Act where the income of the assessee exceeds Rs. 40,000. Sub-section (3) is not applicable to appeals before the Appellate Tribunal filed under Section 24 of the Act. The question of the income of the assessee under the Income-tax Act is irrelevant in so far as hearing of an appeal preferred under Section 24 of the Act is concerned. " Assessee" as defined in Clause (7) of Section 2 of the Income-tax Act means " a person by whom any tax or any other sum of money is payable under this Act, and includes--