DAVINDER SINGH vs. ASSTT. COMM OF WEALTH TAX CIRCLE IV

Facts

The appeal was filed by Davinder Singh (assessee) against an order of the Income Tax Appellate Tribunal (ITAT), Amritsar Bench, dated September 7, 2012, for assessment year 2006-07. The ITAT order had allowed the appeal of the Revenue, imposing Wealth Tax on the assessee. The assessee's counsel presented an order dated March 8, 2019, passed by the Commissioner of Income Tax (Appeals), which observed that lands were under cultivation for assessment years 2003-04 to 2006-07. This order had deleted the penalty levied under Section 18(1)(c) of the Wealth Tax Act for assessment years 2003-04 to 2007-08. Both parties acknowledged that an amendment by the Finance Act, 2013, with retrospective effect from April 1, 1993, excluded Urban Agricultural Land from Wealth Tax. The assessee's appeals for assessment years 2003-04 to 2006-07 had already been allowed, and penalties set aside.

Held

The High Court allowed the appeal and set aside the impugned order dated September 7, 2012, passed by the ITAT, Amritsar. The Court noted that the amendment made by the Finance Act, 2013, with retrospective effect from April 1, 1993, excluded urban agricultural land from the purview of Wealth Tax. The Court observed that this amendment applied to the facts of the present case, as the lands were under cultivation and the sale consideration would not fall within the net worth of the assessee as per the amended provisions. The Court found the ratio of the Commissioner of Income Tax (Appeals)'s order dated March 8, 2019, which was placed on record, to be directly applicable. This order had deleted penalties for similar assessment years, including the one under appeal. Therefore, the Wealth Tax imposed on the assessee for assessment year 2006-07 was deemed not leviable.

Key Issues

1. Whether the Wealth Tax is leviable on urban agricultural land for assessment year 2006-07, considering the retrospective amendment to the Wealth Tax Act by the Finance Act, 2013. Assessee's contentions: The assessee argued that the lands in question were under cultivation, as evidenced by Khasra Girdawari, and that the retrospective amendment by the Finance Act, 2013, excluding urban agricultural land from Wealth Tax, was directly applicable. They relied on the order of the Commissioner of Income Tax (Appeals) dated March 8, 2019, which had allowed similar appeals and deleted penalties for assessment years 2003-04 to 2007-08, including the assessment year in question. The assessee also noted that their appeals for assessment years 2003-04 to 2006-07 had already been allowed. Revenue's contentions: The judgment records that the learned counsel for the respondent (Revenue) sought time to address arguments and get instructions, but no specific contentions were recorded.