2005 PLP (Trib (PTD)

These are ten cross-appeals for the assessment years 1996-97 to 2000-2001, five by the Department and the other five by the assessee appellant, against orders of the learned CIT/WT (Appeals-Zone) Gujranwala, dated 21-10-2003 while the assessee-appellant has also filed two separate appeals for the assessment years 1994-95 and 1995-96 against the combined order of the learned CIT(Appeals-Zone), Gujranwala recorded on 21-10-2003. The main grounds of appeals as raise by the assessee-appellant against the orders passed by the Authorities supra are common one in all the years under appeal which are summarized as under:-- Assessee's Grounds of Appeals for Assessment years 1994-95 to 2000-2001. "That the assessments made by the WTO on the basis of combined notices issued under section 17 and confirmed by the CIT(A) is legally not sustainable in the eyes of law. That, the value of residential house adopted and reduced by the CIT(A) is also not in accordance with the provisions of law and rules. That the PIU rate taken at 72 are against the specification considering the nature and location of land. The CIT(A) has also failed to consider this ground and evidence furnished at the material time of hearing." The assessee-appellant has also filed additional ground of appeal for the years mentioned supra which is elaborated as under:- "That the Taxation Officer has erred in law to pass Wealth Tax Assessment order under sections 16(3)/17 of the W. T. Act, 1963 is illegal, whereas the Taxation Officer is not covered under clause 10 of section 2 of the Wealth. Tax Act, 1963". On the other hand, the Revenue had raised the following common issues in respect of assessment years 1996-97 to 2000-2001:

"That the learned CIT(A) was not justified to reduce the value of House bearing No.747/B, S. Town, Gujranwala from Rs.11,26,425 to Rs.8,00,000 for the assessment years 1996-97 and 1997-98 and Rs.9,00,000 to Rs.8,00,000 in respect of assessment years 1998-99 to 2000-2001 without any cogent reasons. That the learned CIT(A) was not justified to reduce the value of property situated at Vaniawala from Rs.6,90,000 to Rs.5,00,000 for assessment years 1996-97 and 1997-98 and Rs.6,00,000 to Rs. 5,00,000 in respect of assessment years 1998-99 to 2000-2001 without assigning any reasons." Briefly stated the facts of these appeals are that the assessments for the assessment years 1994-1995 to 2000-2001 were finalized by the Taxation Officer under sections 16(3)/17 on 3-6-2003 of the repealed Wealth Tax Act. On the basis of queries by the Audit Authority, notice under section 17 for the assessment years 1994-95 to 2000-2001 was issued on 9-1-2001 which was served upon the assessee properly and in consequence thereto, the wealth tax non-agricultural returns were filed declaring net assets in respect of property bearing House No.747/B, Satellite Town, G. Wala, at Rs.2,50,000 each for the assessment years 1996-97 to 2000-2001 and regarding 2-kanal property situated at Vaina Wala at Rs.1,00,000 each for the assessment years 1996-97 to 2000-2001 while no returns were filed for the assessment years 1994-95 and 1995-96. The Taxation Officer for the detailed reasons as elaborated in the wealth tax assessment orders, completed the assessment by estimating the value at Rs.8,00,000 for the assessment years 1994-95 to 1997-98 and Rs.11,26,425 each for the assessment years 1998-99 to 2000-2001 in respect of house property No.747/B, Satellite Town, Gujranwala. Regarding the property, the Taxation Officer estimated the same at Rs. 5,00,000 for the assessments years 1994-95 and 1995-96, Rs.6,00,000 for the assessment years 1996-97 and 1997-98 and at Rs. 6,90,000 each for the assessment years 1998-99 to 2000-2001. Being aggrieved with the treatment meted out by the Taxation Officer, the assessee-appellant preferred appeal before the learned CIT/WT (Appeals) who vide his combined order cited supra for the assessment year 1994-95 to 2000-2001, directed to adopt the value at Rs.8,00,000 each for the house property No.747/B, Satellite Town, Gujranwala for all the years under appeal and directed regarding value assessed for the property "2-Kanal at Vaniawala, Gujranwala" at Rs.5,00,000 to be adopted for the assessment years 1994-95 to 2000-2001 while the plea of the assessee regarding issuance of notice under section 17 for all the years was not entertained by the learned First Appellate Authority. We have heard the arguments of both the sides. The learned AR of the assessee argued before us that the Taxation Officer has erred in law to pass the wealth tax assessment orders under section 16(3)/17 of the Wealth Tax Act, 1963 for all the assessment years under appeal as the Taxation Officer is not governed under clause 10 of section 2 of the Wealth Tax Act, 1963. In this context, the learned AR of the assessee drew our attention to two cases decided by the Honourable ITAT in re: W.T.A. No.184/LB of 2004 (Assessment year 1998-99) and W.T.As. Nos.325 and 326/LB of 2004 (Assessment years 1999-2000 and 2000-2001) in which it has been held that wealth tax assessments and income tax assessments are governed separately under the Wealth Tax Act, 1963 and Income Tax Ordinance, 1979 respectively. Wealth Tax assessments cannot be taken up or finalized by the Taxation Officer and reliance was placed on the ratio of case-law reported as 1999 PTD (Trib.) 4026 and 1997 PTD

821. In view of the preceding facts, in our considered judgments, the orders of the Taxation Officer in respect of all the assessment years are void and not tenable in the eyes of law as the Taxation Officer has not been specifically mentioned under clause 10 of section 2 of the Wealth Tax Act, 1963 in. view of which the assessment orders passed by the Taxation Officer in respect of assessment years 1994-95 to 2000-2001 are hereby annulled. At the same time, the appeals of the Revenue being devoid of merit and substance are hereby rejected for all the years under appeal. H.B.T./451/Tax(Trib.) Order accordingly.