TMI Blog1976 (10) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... ? 2. Whether, on the facts and in the circumstances of the case, the view taken by the Tribunal that rule 1D of the Wealth-tax Rules, 1957, instead of serving the purpose of the Act, puts a severe curb on it, particularly on the provisions contained in sections 7(1) and 24(6) of the Wealth-tax Act, 1957, and hence it is ultra vires of those sections, is correct in law ? " The assessee owned shares in certain companies and these shares were not quoted in the stock exchange. For the purpose of assessment to Wealth-tax, he adopted certain method of valuation of these shares. This method was not accepted by the Wealth-tax Officer who valued those shares in accordance with rule 1D of the Wealth-tax Rules. This rule was inserted by the Weal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court in Commissioner of Income-tax v. Straw Products Ltd. [1966] 60 ITR 156 (SC) and C. T. Senthilnathan Chettiar v. State of Madras [1968] 67 ITR 102 (SC). The learned counsel for the assessee has, however, submitted that what has been held by the Tribunal is invalid is not any section of the Act, but only a rule which is in direct conflict with the provisions contained in section 7(1) of the Act. He has further submitted that rules can be framed under an Act only to carry out the purposes of the Act and that it is open to a Tribunal constituted under that Act to examine whether any of the rules framed thereunder are in conformity with the provisions contained in the Act or inconsistent therewith or beyond the scope thereof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. Following the reasoning of the Supreme Court in Venkataraman's case [1966] 60 ITR 112 ; 17 STC 418 (SC), the Orissa High Court held in Tata Iron and Steel Co. Ltd. v. State of Orissa [1970] 25 STC 171 (Orissa), that the High Court while deciding a reference in its advisory jurisdiction cannot declare as ultra vires a rule framed under the Act. It is obvious that what the High Court cannot do, the Tribunal also cannot do. It was urged by the learned counsel for the assessee that the High Court of Madras had declared rule 24 of the Appellate Tribunal Rules, 1946, as ultra vires in exercise of its jurisdiction under section 66(2) of the Income-tax Act in S. Chenniappa Mudaliar v. Commissioner of Income-tax [1964] 53 ITR 323 (M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot, therefore, permit the appellants to canvass in this court for the first time the question whether it was competent for the High Court to decide the question of law referred to it under section 11 of the Act." A like view was taken by the Supreme Court in Commissioner of Sales Tax v. Ganga Sugar Corporation [1970] 25 STC 155 (SC). It appears to us that the decision of the Supreme Court in Chenniappa Mudaliar's case [1969] 74 ITR 41 (SC) proceeded on the ground of acquiescence before the High Court. For the reasons stated above we answer question No. 1 referred to us in the negative, in favour of the Commissioner and against the assessee. In view of our answer to question No. 1, we do not consider it necessary to answer question No. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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