TMI Blog1988 (12) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... for the existence of circumstances under section 16A of the WT Act. In the instant case, there is no valid reference under section 16A to the district Valuation Officer and, therefore, his reports are invalid reports as held by us earlier and, therefore, the reports of the District Valuation Officer have to be ignored. For arriving at this decision we are supported by the Andhra Pradesh High Court decision in the case of G. M. Omer Khan v. District Valuation Officer 1977 Tax LR 582, At this stage we have to consider the request on behalf of the Revenue that the matter may be restored to the file of the WTO for making a fresh reference to the appropriate Valuation Officer under section 16A of the Wealth-tax Act. We, however, see no substance in this request inasmuch as in our opinion, a report from a Valuation Officer is not a sine qua non for a wealth-tax assessment. As may be seen from the language of section 16A of the WT Act, the WTO may make a reference to a Valuation Officer in certain circumstances. In legal parlance "may" always includes "may not". It is entirely discretionary for the WTO either to make a reference or not to make a reference. In the instant case, he might ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. Rs. Rs. ----------------------------------------------------------------------------- International Bldg. 0-2-0 85,625 6,08,875 4,59,500 Engineering Centre 0-4-0 2,84,250 7,47,750 5,49,250 Shivsagar Estate 0-0-4 1,44,279 5,59,957 2,90,240 Plot No. 79 0-0-5 51,433(-) 26,780 26,750 Farm House 0-4-0 - - 44,000 Wardha Rd. Garden (Nonagrl.) 0-4-0 - 78,875 14,600 Wardha Rd. Garden (Argicultural) 0-4-0 29,075 - 64,276 Land at Kachimet 1.20 12,000 12,000 12,000 --------------------------------------- Total : 6,06,662 20,34,237 14,60,616 ----------------------------------------------------------------------------- 3. Shri C.J. Thakar, the learned authorised representative of the assessee, while opening the case of the assessee, made the following pertinent points : That reference made by the Wealth-tax Officer to the Valuation Cell under section 16A of the Wealth-tax Act, 1957 is not legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus argued that in the present case the District Valuation Officer could not have made the valuation report as he lacked jurisdiction and accordingly this report could not have been adopted for the purposes of framing of assessment and once it is so, the only evidence with the Wealth-tax Officer was the assessee's registered valuer's report, which could only have been adopted. Shri Thakar thus contended that in view of this legal position as also the earlier order of the Income-tax Appellate Tribunal dated 30th November, 1981, the assessee's version has to be accepted. He further placed strong reliance on section 3, which deals with the topic 'charge of wealth-tax' and provides that there shall be charged for every assessment year wealth-tax in respect of the net wealth, subject to the other provisions contained in the Act. He relied on the definition of 'assets' as defined in section 2(e) of the Act as also definition of 'net wealth' as defined in section 2(m) of the Act. Shri Thakar here specifically pointed out that 'any interest in property' is an asset and the asset must 'belong to the assessee' for the purposes of assessment. Shri Thakar contended that jurisdiction of the Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rections of the ITAT in the order made for the earlier years having become final, there is no justification to make a departure, particularly when the directions of the ITAT have been made as on the valuation date 31st March, 1974, and the valuation date involved in the present appeal being 31st March, 1975, there being no distinguishing factors for arriving at a different valuation the same values should have been adopted. He contended that the evidentiary value of District Valuation Officer's report was not affected and can be taken note of, but not as a binding report on the Wealth-tax Officer, and since the said report had already been considered by the ITAT for the earlier years, no fresh reference need have been made. Hence, the earlier order of the ITAT should have been followed. He finally submitted that the reference be held to be bad, and that assessments be framed on the basis of assessee's registered valuer's report, which was improperly rejected. 4. The learned departmental representative appearing for the revenue made the following points :- - that reference under section 16A of the Act and the resultant valuation report were valid; - that the co-owners of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Valuation Officer's report were legal and valid. He also contended that demonstrably, it need not be proved that the District Valuation Officer has thought it expedient and necessary so to do and taken upon himself the valuation as the properties were huge and of heavy valuation as also fell within his jurisdiction as to valuation. Board's circular as placed on page 56 of revenue's paper book was also pressed into service. It contained directions of the Board under the enabling provision of sub-rule (2) of rule 3A. In the alternate, the learned departmental representative pleaded that jurisdiction is a procedure, hence it at all there was any infirmity attached to the District Valuation Officer's report, it was a mere irregularity and not an illegality. Guduthur Bros. v. ITO [1960] 40 ITR 298 the Supreme Court was pressed into service for this proposition. Further, it was contended that the District Valuation Officer's report could not have been brushed aside because it still retained its character as a piece of evidence, despite (assuming but not admitting) that this District Valuation Officer's report was without jurisdiction. Dr. Pratap Singh v. Director of Enforcement [1985] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax/wealth-tax proceedings since under section 26 of the Income-tax Act, 1961 if the shares are determinate, the co-owners are assessed as individuals and not as 'association of persons' and that is the case here also; that valuation is relatable to assessee's 'interest in the property' and not the property as a whole; that taxation laws are codes by themselves and no external aid is required for interpreting the same. Rules of constructions and interpretation of statutes have to be observed as enunciated by their Lordships of the Hon'ble Supreme Court in Kanai Lal Sur v. Paramnidhi Sadhukhan AIR 1957 SC 907; that question of jurisdiction goes to the root of the cause and this can be raised by any party at any stage of the proceedings and hardship to a party is no criterion of consideration for not following the correct interpretation of a statute; the ITAT should be consistent in its decisions and order for earlier years should be followed and directions issued accordingly; CIT v. L. G. Ramamurthi [1977] 110 ITR 453 (Mad.) was pressed into service for the above proposition. Concluding, it was contended that since the earlier order of the ITAT had become final, the natural infe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturned is less than its fair market value; (b) in any other case, if the Wealth-tax Officer is of opinion - (i) that the fair market value of the asset exceeds the value of the asset as returned by more than such percentage of the value of the asset as returned or by more than such amount as may be prescribed in this behalf; or (ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do." From the above, it follows that the reference has to be made to 'a Valuation Officer'. 'Valuation Officer' has been defined by section 2(r) as under : '"Valuation Officer" means a person appointed as a Valuation Officer under section 12A, and includes a Regional Valuation Officer, a District Valuation Officer, and an Assistant Valuation Officer;' Valuation Officer for the purposes of section 16A (1) as such has to be a person appointed as a Valuation Officer under section 12A and includes Regional Valuation Officer, a District Valuation Officer and an Assistant Valuation Officer. So the reference by the Wealth-tax Officer under section 16A in terms means a reference made to either of the three officers mentioned in section 2(r). Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer referred to in clause (i) having jurisdiction in respect of the area may, if he considers it necessary or expedient so to do for the purpose of proper and efficient management of the work of valuation, himself perform such functions in relation to any asset referred to in clause (ii) : Provided further that the Valuation Officer referred to in clause (ii) having jurisdiction in respect of the area may, if he considers it necessary or expedient so to do for the purpose of proper and efficient management of the work of valuation, himself perform such functions in relation to any asset referred to in clause (iii). (4) Where the valuation of any asset, being building or land or any right in any building or land, referred to the District Valuation Officer is pending with him on the 15th day of December, 1976, being the date of commencement of the Wealth-tax (Fourth Amendment) Rules, 1976, the District Valuation Officer shall transfer the reference to the Valuation Officer referred to in clause (ii) of sub-rule (3) if the value of the asset as declared in the return made by the assessee under section 14 or section 15 does not exceed Rs. 10 lakhs or, if the asset is not disclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not be for mala fide reasons. There is no suggestion that the District Valuation Officer had entertained any mala fide reasons, other than bona fide exercise of powers vested in him. A combined reading of section 16A and rule 3A extracted above, do make it clear to us, that the Wealth-tax Officer should make a reference for valuation to a "Valuation Officer" and it does not specify that at that time of reference he should go by the monetary limits prescribed in rule 3A. After a reference was made to the Valuation Officer, which is valid in all aspects it is a matter left to them to organise the work inter se for proper and efficient management. The contention based upon pecuniary jurisdiction cannot therefore stand. On the facts and in the circumstances of this assessee's case, where the assessee is a co-owner with several others and the valuation of the buildings in which the assessee's rights/shares worth lakhs of rupees are involved, in our considered opinion, the District Valuation Officer can be said to have justifiably, on facts and in law, exercised jurisdiction making the valuation report, though it is desirable that a noting to that effect is made, yet its absence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 24, the Valuation Officer has to be heard also during appellate proceedings. 9. As regards the issue about the objection to the jurisdiction and whether it can be raised for the first time at the stage of the Income-tax Appellate Tribunal or not, we will say that jurisdiction goes to the root of the matter and accordingly this being a pure and simple issue of law, not involving investigation into fresh facts, it can be raised at any stage by any party. The correct position in law is that the ITAT have the jurisdiction in every cast to entertain a ground, which has not been urged before the lower authorities whose order is appealed against, though these powers have to be exercised judicially provided the matter has relation to the order appealed against. In this case, the question of jurisdiction relates to the competency of the forum and accordingly once an authority/Tribunal has no jurisdiction, its actions have to be held as non est not being in accordance with law and powers conferred on it by Parliament. Since the assessee here agitates and attacks the very jurisdiction of the District Valuation Officer to make the report, which has been adopted at the assessment stage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting claims of the different owners inter se. In the case of co-owners the title of one is rendered consistent with that of the other by the existence of reciprocal obligations or restricted use and enjoyment. Co-ownership may assume different forms by virtue of the different incidents attached to it by law. Its two chief kinds in English law are distinguished as ownership in common and joint ownership. The most important difference between these relates to the effect of the death of one of the co-owners. In ownership in common the right of a dead man descends to his successors like any other inheritable right. But on the death of one of two joint owners his ownership dies with him, and the survivor becomes the sole owner by virtue of his right of survivorship or jus accrescendi.' 10. The above, in our considered opinion, is not relevant in the context of the issue we are seized with in the present appeal, since it is relevant for Rent Control Acts and the civil litigation. The tax law being self-contained code by itself, the best external aid could be had, in this case, from section 26 of the Income-tax Act, 1961, which reads as under : 'Where property consisting of building ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that his assumption of jurisdiction having regard to the circumstances of the case was valid and bona fide. Hence, the decision of Nagpur Bench cannot be considered to be on all fours with the case before us, and thus clearly distinguishable. 12. In view of our discussion as above, our answer to the question is as under : That the assessment made on the basis of valuation report of the District Valuation Officer is valid and has to be adopted under sub-section (6) of section 16A of the Act for the purposes of framing of the assessment and it has to be considered in accordance with law by the appellate authorities along with the assessee's registered valuer's report. 13. The impugned order of the learned first appellate authority stands set aside and the appeal stands restored to his file for fresh decision in accordance with law. Assessee as also the Assessing Officer shall be heard. District Valuation Officer's report as also assessee's registered valuer's report shall be taken note of and considered in full in all aspects. District Valuation Officer shall be heard as provided for under sub-section (3) of section 23 of the Act. If the assessee so chooses, her right of re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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