2001 PLP 1944 (PTD)

Held, Held, that the Wealth Tax Officer had powers to rectify the assessment by resorting to powers under section 35 of the Act. J. M. Bhatia, A. A. C. of W. T. v. J. M. Shah. (1985) 156 ITR 474 (SC) fol Sanjiv Khanna with Ajay Jha for the Commissioner Nemo for the Assessee ARIJIT PASAYAT, C.J.‑‑‑These two reference applications invoke identical questions, pertaining to the assessment years 1968‑69 and 1969‑70, which have been referred under section 27(1) of the Wealth Tax Act, 1957 (for short "the Act"), by the Income‑tax Appellate Tribunal Delhi Bench‑E (for short "the Tribunal"), for the opinion of this Court: , "Whether, on the facts and in the circumst8nces of the case, the provisions of section 35 of the Wealth Tax Act can be invoked to rectify the original assessment and to include the value of the jewellery, thus, giving effect to the amendments effected in section 5(l)(viii) of the Wealth Tax Act, 1957 by the Finance (No.2) Act of 1971?" Since the 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: The 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. The Assessing Officer accepted the assessee's claim and the value of jewellery was nor included in the net wealth. Subsequently, by the Finance (No.2) Act, 1971, an amendment was made to section 5(l)(viii) making jewellery liable to wealth tax. Two Explanations were added to this amended section 5(I)(viii), enlarging the scope of interpretation of .the word "jewellery". The Explanations were made operative with effect from April 1, 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 tinder section 35 of the Act and the orders were passed including the value of jewellery, in the net wealth of the assessee. The appeals were tiled before the Appellate Assistant Commissioner (for short "the A.A.C."). 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 Appellate Assistant Commissioner. In appeal by the Revenue, the order of the Appellate Assistant Commissioner 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 the enactment of the amending provision and, therefore, section 35 had no application to the case. On being moved for reference, the prayer was accepted by the Tribunal. Heard learned counsel for the Revenue. There is no appearance on behalf of the assessee in spite of service notice. The point in issue has been directly dealt with and adjudicated upon by the apex Court in J.M. Bhatia, A.A.C. of W.T. v. J.M. Shah (1985) 156 ITR 474, wherein it was held that section 35 had application. Following the ratio of the said decision, we answer the question in the affirmative, in favour of the Revenue and against the assessee. The reference applications are disposed of. M.B.A./509/FC Order accordingly.