TMI Blog1993 (10) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that rule 1BB of the Wealth-tax Rules, 1957, is procedural in nature and retrospective in operation and, therefore, the same is applicable in the year under consideration ?" The brief facts of the case are that the assessee filed a return of its net wealth on the basis of the report of the registered valuer but the Wealth-tax Officer referred the matter for valuation to the Departmental Valuation Officer under section 16A of the Wealth-tax Act and framed the assessments in conformity with the report of the Valuation Officer. The assessed wealth included immovable property which was self-occupied. In the self-occupied property the area of 901 sq. metres was under self-occupation and 319 sq. metres was let out. While valuing the immovable property which was partly under self-occupation, the Valuation Officer and the Wealth-tax Officer did not give due consideration to the statutory rule 1BB of the Wealth-tax Rules. The Appellate Tribunal set aside the order of the lower authorities and restored the matter back to the file of the Wealth-tax Officer for fresh decision in accordance wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be drawn about the existence of fact B, is inherently relevant in the matter of proving fact B and has inherently any probative or persuasive value in that behalf or not. If fact A is inherently relevant in proving the existence of fact B and to any rational mind it would bear a probative or persuasive value in the matter of proving the existence of fact B, then a rule prescribing either a rebuttable presumption or an irrebuttable presumption in that behalf would be a rule of evidence. On the other hand, if fact A is inherently not relevant in proving the existence of fact B or has no probative value in that behalf and yet a rule is made prescribing for a rebuttable or an irrebuttable presumption in that connection, that rule would be a rule of substantive law and not a rule of evidence." The special leave petition was also dismissed in the case of CWT v. Dr. B. N. Gyani and CWT v. Naresh. The Karnataka High Court in CWT v. Vidyavathi Kapur [1984] 150 ITR 319 has held that the provisions of rule 1BB are procedural in nature and can be called into aid in respect of pending matters. The Madhya Pradesh High Court in CWT v. Lachmandas Bhatia [1987] 163 ITR 586 has also held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t applies to all the proceedings pending on the date it was brought into force. In Dilip Kumar Mitra v. CWT [1993] 200 ITR 336, it was held by the Calcutta High Court that where the statute itself fixes a method of valuation as the statutory method, that method shall have its authoritative and statutory force for all the officers under the Act-the Assessing Officer, the Appellate Officer or the Appellate Tribunal or the Departmental Valuation Officer. The provisions of rule 1BB were held mandatory and binding on the Departmental Valuation Officer. In Bella Cajeton Travasso v. Third WTO [1987] 166 ITR 49, the Bombay High Court has also held that the Valuation Officer is duty-bound to take into consideration the applicability of rule 1BB and carry out the work of valuation in accordance with the provisions of the Act and the Rules. We have considered the arguments of both learned counsel. The provisions of rule 1BB were inserted with effect from April 1, 1979, vide Gazette notification dated March 30, 1979. The said rule during the relevant period was as under : "Rule 1BB.-(1) For the purposes of sub-section (1) of section 7, the value of a house which is wholly or mainly use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is evident that normally the interpretation with regard to the statute has to be taken as prospective and particularly in those cases where the right of any person is affected. If any vested rights are affected, then retrospectivity cannot be presumed. Thus, if a statute takes away or impairs any vested right or creates new obligations, then it has to be construed prospectively. Maxwell on the Interpretation of Statutes has written as under: "The presumption against retrospective construction has no application to enactments which affect only the procedure and practice of the courts. No person has a vested right in any course of procedure, but only the right of prosecution or defence in the manner prescribed for the time being, by or for the court in which he sues, and, if an Act of Parliament alters that mode of procedure, he can only proceed according to the altered mode. 'Alterations in the form of procedure are always retrospective, unless there is some good reason or other why they should not be'." In respect of pending actions, it has been mentioned that in general, when the substantive law is altered during the pendency of an action, the rights of the parties are deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d rule, that alone is to be adopted and it only excludes the discretion of the Wealth-tax Officer in estimating the value on an asset. Beside this, the provisions of section 7(1) of the Wealth-tax Act mention that the value is to be estimated 'subject to any rules made in this behalf', this provision makes it clear that the intention for the method of valuation is to prescribe a procedure and the discretion of the Wealth-tax Officer to adopt any other method no longer remains. The opinion which the Valuation Officer has to form no doubt relates to the valuation date in respect of property which, if sold in the open market, it would fetch the price but by taking into consideration the formula given under the said rule, it eliminated discretionary or arbitrary action on the part of the Wealth-tax Officer. Sub-rule (5) of rule 1BB also provides that where the Wealth-tax Officer is of the opinion that it is not practicable to apply rule 1BB in a particular case, then with the approval of the Inspecting Assistant Commissioner, the rule would have no application. The rule is also not applicable where the difference between the unbuilt area and the specified area exceeds 20 per cent. of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Officer and this change is only to improve the existing system and, therefore, has to be considered as not inflicting detriment on anyone. The provision cannot be considered as substantive. There can be no dispute that the provisions of section 7 of the Act are machinery provisions and prescribe the procedure for determination of estimation of the value of the asset. As observed by the apex court, in the case of CWT v. Maharaja Kumar Kamal Singh [1984] 146 ITR 202, section 7 provides the method as to how the value has to be assessed and the section itself has been made subject to the rules. In accordance with the provisions of section 46 of the Act, power has been conferred to frame rules and rule 1BB having been framed in pursuance of such power is in aid of the section to determine the value of an asset. The provisions of rule 1BB, therefore, cannot be said to be substantive provisions so as to be applicable prospectively only. No existing right of any person is affected and, on the contrary, the rules have been made applicable uniformly to all assessees in respect of house property which is "wholly" or "mainly" used for residential purposes. No doubt, there was a load of lit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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