1985 (11) TMI 73 - AT - Income Tax

Summary

Issues:
Rectification of order enhancing market value of shares under section 23(5) Proviso to the GT Act based on procedural irregularities and lack of natural justice.

Analysis:
The case involved a Miscellaneous Application filed by the assessee's Chartered Accountant seeking rectification of the Tribunal's order enhancing the market value of shares under section 23(5) Proviso to the GT Act. The application highlighted various procedural irregularities and lack of natural justice in the Tribunal's order. The application contended that the notice issued did not provide clear and adequate information regarding the enhancement, leading to a lack of proper attention from the assessee. It was argued that a separate show cause notice of enhancement was not given, and the Tribunal allegedly went beyond the evidence on record in reaching its conclusion.

During the formal hearing, the assessee's counsel supported the application, referencing relevant legal texts to strengthen the argument. On the other hand, the Departmental Representative opposed the application, asserting that there was no mistake in the order requiring rectification. It was argued that the Tribunal did not make any enhancement but directed the Gift Tax Officer (GTO) to value the shares, which could result in either a higher or lower valuation. The Departmental Representative emphasized that the notice issued complied with the requirements of section 23(5) of the GT Act.

The Tribunal, after considering the arguments, concluded that there was no mistake in the order necessitating rectification. It clarified that the Tribunal's direction to the GTO was for valuation purposes and not for enhancement. The Tribunal noted that the notice issued, which mentioned section 23(5) of the GT Act, provided the necessary opportunity of being heard to the assessee. The Tribunal rejected the technical objection regarding the notice being issued to the assessee's counsel instead of the assessee, stating that notice to the agent is equivalent to notice to the assessee. Ultimately, the Tribunal dismissed the assessee's application for rectification, upholding the original order enhancing the market value of shares.