COMMISSIONER OF WELATH TAX vs. GAUTAM SARABHAI(HUF)

WTR/57/1983HC GujaratGJHC24012021198306 February 1997Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE R.BALIA2 pages
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What were the facts?

The Commissioner of Wealth Tax (Revenue) passed an order under Section 25(2) of the Wealth Tax Act, 1957, which was challenged before the Income Tax Appellate Tribunal (Tribunal). The Tribunal set aside the order of the Commissioner. The Revenue has filed a reference application to the High Court of Gujarat at Ahmedabad, seeking the Court's opinion on whether the Tribunal was right in setting aside the Commissioner's order. The assessment year(s) are not explicitly stated. The amount in dispute is not mentioned. The procedural history involves the Commissioner's order, the Tribunal's decision to set it aside, and the subsequent reference to the High Court.

What did the High Court hold?

The High Court held that the Tribunal was right in law in concluding that the order passed by the Commissioner of Wealth Tax under Section 25(2) of the Wealth Tax Act, 1957, was liable to be set aside. The reasoning is based on the precedent set in CWT Vs. Amichand C. Shah (H.U.F), 218 ITR 659. In that case, the Court had upheld the Tribunal's finding that a valuation report, which was not part of the record before the WTO, could not be considered by the Commissioner for invoking jurisdiction under Section 25(2). Therefore, following this precedent, the High Court answered the referred question in the affirmative, in favour of the assessee and against the revenue. The operative direction is that the reference stands disposed of accordingly.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in coming to the conclusion that the order passed by the Commissioner of Wealth Tax under Section 25(2) of the Wealth Tax Act, 1957 was liable to be set aside? The Revenue's contention, implied by the reference, is that the Tribunal erred in setting aside the Commissioner's order. The Assessee's contention, as indicated by the Tribunal's decision being upheld, is that the Commissioner's order was indeed liable to be set aside. The judgment relies on a previous decision of the same Court in CWT Vs. Amichand C. Shah (H.U.F), reported in 218 ITR 659, which dealt with a similar issue concerning the Commissioner's jurisdiction under Section 25(2) based on a valuation report not forming part of the record before the Wealth Tax Officer (WTO).

Which sections of the Income-tax Act were involved?

Section 25(2),Section 27(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

WEALTH TAX REFERENCE No 57 of 1983

For Approval and Signature:

Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE R.BALIA. ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements?

2.

To be referred to the Reporter or not?

3.

Whether Their Lordships wish to see the fair copy of the judgement?

4.

Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge?

The order continues below.

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