TMI Blog2000 (3) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... eir report and is not such compliance of natural justice 'implicit in the exercise of such power' as opined by the Supreme Court in State of Orissa v. Dr. Miss Binapani Dei, AIR 1967 SC 1269 ? (3) Whether, on the facts and in the circumstances of the case and in view of the contents of the sworn statement and the finding of the officer that the assessee is having unaccounted professional income and in the absence of a contrary finding by the Tribunal should not the Tribunal have under law sustained the addition to that extent under the head 'Professional income'?" Learned counsel for the parties agreed that while the third question needs no change, the first and second questions may be clubbed together and reframed. The questions are consolidated and reframed as follows : "Whether, on the facts and in the circumstances of the case, principles of natural justice warranted hearing of the Valuation Officer, even if it is held that such a prescription has not been statutorily made ?" The factual position, as set out in the statement of case, is as follows : The assessee is an associate professor of cardiology in Calicut Medical College. He had not maintained accounts for his pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer. So far as professional income is concerned, the Tribunal observed that in the absence of any specific addition by the Assessing Officer on the basis of the assessee's statement, though referred to for a minor variation of Rs. 2,500, no interference with the Commissioner of Income-tax (Appeals)'s order was warranted. Learned counsel for the Revenue, with reference to section 55A of the Act, submitted that the provisions of section 23(3A) of the Wealth-tax Act, were ipso facto applicable and the Tribunal has not considered it in the proper perspective. Learned counsel for the assessee submitted that reference under section 55A has no application to the facts of the case. By way of reply to the said contention, it is submitted by learned counsel for the Revenue that even if it is accepted that the provisions of the section 55A of the Act are not applicable, principles of natural justice mandated grant of such opportunity of hearing. Since much stress has been laid by learned counsel in regard to the applicability of section 55A, it is necessary to refer to the said provision, which reads as follows : "55A. With a view to ascertaining the fair market value of a capital asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er", it cannot have application only to Part E of section 14 dealing with "capital gains". On the contrary, learned counsel for the assessee submitted that it is exclusively meant for income from "capital gains". In order to appreciate these rival submissions, apart from section 55A, some other provisions of the Act having a bearing need to be noted. Section 2(14) of the Act deals with "capital asset", which has been referred to in section 55A. The same reads as follows : "(14) 'capital asset' means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include--- (i) any stock-in-trade, consumable stores or raw materials held for the purposes of his business or profession ; (ii) personal effects, that is to say, movable property (including wearing apparel and furniture, but excluding jewellery) held for personal use by the assessee or any member of his family dependent on him : Explanation.---For the purposes of this sub-clause, 'jewellery' includes--- (a) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions involved relates to valuation of any asset, the appellate authority is required to give notice to the Valuation Officer under sub-section (3A) of section 23 of the said Act. Similarly, the Tribunal is required to give notice before disposing of an appeal under the proviso to subsection (5) of section 24 of the Wealth-tax Act. Section 16A deals with reference to Valuation Officer and his order thereunder. Sub-section (6) thereof provides that the Assessing Officer shall make the valuation in conformity with the estimate of the Valuation Officer. The said provision was introduced by the Taxation Laws (Amendment) Act, 1972, with effect from January 1, 1973. Sub-section (3A) of section 23 and the proviso to sub-section (5) of section 24 dealing with appeals before the first appellate authority and the Tribunal were simultaneously introduced. They specifically provide for opportunity of hearing to the Valuation Officer, There are no corresponding provisions in sections 250 and 254 of the Act. Mutatis mutandis application of certain provisions of sections 16A, 23 and 24 of the Wealth-tax Act vis-a-vis section 55A of the Act shall not change the position, so far as this case is conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... othing prevents such officer from appearing at the hearing of the appeal or the first appellate authority calling upon him for hearing (see CWT v. Shrenik Kasturbhai (HUF) [1987] 165 ITR 661 (SC)). There is no fetter on the Assessing Officer/Income-tax Officer appearing, if so required, before the first appellape authority. By the amendment Act of 1972, special provisions have been made in the Wealth-tax Act relating to references to Valuation Officers by the Wealth-tax Officer and appearance by registered valuers. These provisions relate to valuation of assets for the purpose of capital gains* The following provisions of the Wealth-tax Act applicable in relation to a reference made by the Wealth-tax Officer under section 16A of that Act apply mutatis mutandis to a reference made by the Income-tax Officer under section 55A : (i) Sub-sections (2), (3), (4), (5) and (6) of section 16A relating to a reference to a Valuation Officer. (ii) Clauses (ha) and (i) of sub-section (1) and sub-sections (3A) and (4) of section 23 (relating to appeal to the Appellate Assistant Commissioner from orders of Wealth-tax Officer). (iii) Sub-section (5) of section 24 (relating to appeal to the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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