TMI Blog1995 (11) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... ved valuer. The valuation date for the purpose of assessment year 1975-76 was December 31, 1974. On the basis of the said revised return for the assessment year 1975-76 disclosing the valuation of the property as on December 31, 1974, and on the basis of the valuation report dated September 15, 1976, the Commissioner of Wealth-tax assumed the jurisdiction under section 25(2) of the Wealth-tax Act, 1957 ("the Act", for brevity), and issued notice to the assessee to show cause as to why the assessment in respect of the assessment year 1974-75 be not revised as in his opinion the order of assessment was erroneous and prejudicial lo the interests of the Revenue. The assessee contended that the valuation report as well as the revised return in respect of the assessment year 1975-76 could not be considered to be part of the record which the Commissioner could take into consideration for the purpose of invoking jurisdiction under section 25(2) of the Act. His action, according to the assessee, could be confined on the basis of the record as was available on the date of the order sought to be revised and not on the date of passing of the order by the Commissioner. The Commissioner reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t stood at the time the order was made by the Wealth-tax Officer ? 3. Whether, on the facts and in the circumstances of the case, the decision of the Appellate Tribunal in setting aside the order of the Commissioner under section 25(2) of the Wealth-tax Act, 1957, is based on correct principles of law ? " We have heard learned counsel for the parties. In our opinion, though three separate questions have been referred, in fact, all the three questions reflect the same controversy. In this connection, it would be appropriate to refer to the provisions of sub-section (2) of section 25 of the Act : " S. 25(2) Without prejudice to the provisions contained in sub-section (1), the Commissioner may call for and examine the record of any proceeding under, this Act, and if he considers that any order passed therein by an Assessing Officer is erroneous in so far as it is prejudicial to the ' interests of the Revenue, he may, after giving the assessee an opportunity of being heard, and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment or cancell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section (2) of section 25 of the Act for revising the assessment of a particular assessment year, the excursion of the Commissioner must be confined to the record of the year concerned for which the assessment has been framed which is sought to be revised. Any material which does not concern the assessment of that year cannot, in our opinion, be considered as part of the record of that proceeding in which the order has been made. It need hardly be elaborated that each assessment year is a unit by itself and the proceedings of one assessment year do not dovetail into the proceedings of another year. On the undisputed facts, the Commissioner was seeking to revise the assessment order for the assessment year 1974-75. The material on the basis of which the Commissioner assumed jurisdiction was the revised return for the assessment year 1975-76 coupled with the valuation report by the approved valuer as on the valuation date related to the assessment year 1975-76, that is to say, December 31, 1974. Both the materials were not part of the record of the proceedings for the assessment year 1974-75, the order passed wherein was sought to be revised. It was, therefore, not competent for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner would be to find out as to whether on the material available on the record of the proceedings the conclusion reached by the Assessing Officer could be sustained or not. The satisfaction may also be as to whether the assessing authority has held relevant inquiry to find the correct facts necessary for making the proper levy. It is only on reaching the conclusion that the order by the Assessing Officer is erroneous that the next question arises as to whether the error committed by the Assessing Officer is prejudicial to the interests of the Revenue. The primary condition for reaching the conclusion about the erroneous nature of the order qua the conclusions reached or the inadequacy of inquiry undoubtedly would be that the inquiry must be confined to the material which is relevant. From this angle also the valuation report and the declaration of the valuation by the assessee for the subsequent year was not relevant material for examining the correctness of the conclusions of the Wealth-tax Officer about the valuation of the assets in question. Where the assessee in his return for a particular assessment year disclosed the property as his asset and offered its esti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2] 198 ITR 611 and of the Madras High Court in CIT v. Smt. Lakshmi Narayanan [1986] 157 ITR 816. Having carefully gone through the reports we are of the opinion that in both the cases the question which we are called upon to decide was not before the courts. In both the above cases, the courts were concerned with whether the Commissioner could revise the order of the assessing authority by holding it to be erroneous in law on the basis of a subsequent decision of the High Court or the Supreme Court. As we have already discussed the question whether there is an error in application of legal principles or the law has been erroneously interpreted by the Assessing Officer, it is not a question, the answer to which is to be found on the record. But in such cases examination of the record is, required for the purpose of determining whether to the facts found on record law has been correctly applied. In considering this aspect, the decision of the court, whether rendered before or after the affected order can always be considered. This is so because while interpreting the law the courts only declare the law and that state of law is deemed to exist at all times including the period for w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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