1985 (8) TMI 63 - HC - Wealth-tax

Summary

Issues:
Application under section 27(3) of the Wealth-tax Act for directing the Income-tax Appellate Tribunal to state a case and refer the question of law arising out of the Tribunal's order dated June 24, 1977, passed in Wealth-tax Appeals for the assessment years 1967-68, 1968-69, and 1969-70.

Analysis:
The judgment delivered by the High Court of Rajasthan pertains to three applications under section 27(3) of the Wealth-tax Act, 1957. The dispute arose when the Wealth-tax Officer, Jodhpur, initially did not include the entire value of jewellery and ornaments in the total wealth of the assessee based on a Supreme Court decision. However, an amendment to section 5(1)(viii) of the Wealth-tax Act was made with retrospective effect, thereby making jewellery and ornaments intended for personal use taxable. Subsequently, the Wealth-tax Officer revised the original assessment for the three years in question. The Appellate Assistant Commissioner annulled the Wealth-tax Officer's order, leading to appeals by the Commissioner of Wealth-tax to the Income-tax Appellate Tribunal. The Tribunal, in its order dated June 24, 1977, dismissed the appeals, stating that the exemption granted initially did not reveal a mistake apparent from the record. The petitioner sought direction for a reference on the question of law regarding the Tribunal's decision.

The High Court, after considering the arguments, concluded that no question of law arose since the original assessment did not exhibit a mistake apparent from the record justifying rectification under section 35 of the Wealth-tax Act. The Court relied on the Supreme Court's decision in Balaram, ITO v. Volkart Brothers, emphasizing that a mistake apparent on the record must be glaring and obvious, not a debatable point of law. The Court also cited similar decisions from the Bombay High Court and the Gujarat High Court, highlighting the need for errors to be apparent, obvious, and incapable of debate for rectification under the Act.

Furthermore, the Court referenced a case under the Income-tax Act to emphasize the requirement for a mistake to be apparent on the record for rectification. The Court noted that the original assessment did not demonstrate a patent mistake, aligning with the principles laid down in previous judgments. Ultimately, the High Court declined to direct the Tribunal to state the case on the question raised by the petitioner, as no mistake apparent from the record was found. Consequently, the petitions were dismissed, with costs to be borne by the parties involved.