TMI Blog1991 (8) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... am, for the assessment year 1975-76, vide order of assessment dated November 5, 1975, should be taken to be the value in the case of the assessee also ? 4. Whether the Tribunal was justified in law in holding that reference to the Valuation Officer under section 16A was valid even though the provisions of section 7(4) were applicable for the assessment year 1975-76 ? " It may be mentioned that the assessee prayed for referring one more question, which was rejected by the Tribunal. The facts are as follows : The present reference relates to the assessment year 1975-76. The Wealth-tax Officer noted that the assessee owned movable and immovable properties located in Assam and Rajasthan and there is one self-occupied house property at Calcutta which is jointly owned by the two Hindu undivided families, viz., the assessee (Messrs. Gulabrai Hanumanbux) and Messrs. Keshoram Radheshyam, having equal shares. In the report of the valuer dated October 28, 1972, the value of the Calcutta property was shown as Rs. 3,63,500 being the half share of the assessee. This was adopted for the assessment year 1972-73. The contention of the assessee was that since the building is self-acquired, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alance-sheet of such business as on the valuation date and making such adjustments therein as may be prescribed ; (b) where the assessee carrying on the business is a company not resident in India and a computation in accordance with clause (a) cannot be made by reason of the absence of any separate balance-sheet drawn up for the affairs of such business in India, the Wealth-tax Officer may take the net value of the assets of the business in India to be that proportion of the- net value of the assets of the business as a whole wherever carried on determined as aforesaid as the income arising from the business in India during the year ending with the valuation date bears to the aggregate income from the business wherever arising during that year. (3) Notwithstanding anything contained in sub-section (1) where the valuation of any asset is referred by the Wealth-tax Officer to the Valuation Officer under section 16A, the value of such asset shall be estimated to be the price which, in the opinion of the Valuation Officer, it would fetch if sold in the open market on the valuation date, or, in the case of an asset being a house referred to in sub-section (4), the valuation date re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere that though the present reference relates to the assessment year 1975-76, the assessment order was passed on March 20, 1980, i.e., after April 1, 1976, which is the date on which the Finance Act, 1976, came into force. Mr. Talukdar, learned counsel for the Revenue, has urged that the above provision being substantive in character, it would operate prospectively. At page 216 of 'Maxwell on the Interpretation of Statutes', Twelfth Edition, the learned author has reproduced the judgment of R. S. Wright J., in In re Athlumney [1898] 2 QB 547, 551, wherein it was held as follows: "Perhaps no rule of construction is more firmly established than this that a retrospective operation is not to be given to a statute so as to impair an existing right or obligation, otherwise than as regards matter of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only. " The learned author at page 222 has observed that the presumption against retrospective construction has no application to enactments which affect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the Revenue, in the petition dated January 25, 1980, exercising the option, vide annexure-D to the paper book, it was not clearly stated that the assessee exercised his right under sub-section (4) of section 7 of the Act. In reply, Mr. Saraf has urged that the assessment year relates to 1975-76 and as the new amendment came into force on April 1, 1976, the assessee could not have exercised his option at the time of filing the return; that apart, according to learned counsel, exercising the option at the time of filing of return is not mandatory and such option can be given before the assessment order is passed. According to Mr. Saraf, the petition exercising the option fulfils all the requirements of sub-section (4) of section 7 of the Act. We have already held that sub-section (4) of section 7 of the Act is procedural. The proviso to the said sub-section, inter alia, provides that the option has to be specified in the return of net wealth. The crucial point is whether specifying the option along with the return is mandatory in nature or only directory. We have already held that being procedural in nature, the sub-section shall have retrospective effect. So ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n favour of the assessee may be accepted (see CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC)). In the present reference also, assuming that, even if there is any doubt that the above petition dated January 25, 1980, was not a proper option, it should be held that it was an option duly exercised by the assessee. Situated thus, our view in respect of questions Nos. 1 and 2 is that section 7(4) of the Act being procedural shall have retrospective effect and would, accordingly, apply to the assessment year 1975-76 in the case of the present assessee and the assessee is entitled to get the benefit of subsection (4). We further hold that the assessee has duly exercised his option as required under sub-section (4) of section 7 of the Act. As to question No. 4, we are of the opinion that, as the option has been exercised by the assessee validly and legally under sub-section (4) of section 7 of the Act, the reference to the Valuation Officer by the assessing authority under section 16A was not a valid one. We may mention that the submission may in respect o question No. 3 has got some legal importance. From the facts of the present reference stated above, the house property in qu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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