THE COMMISSIONER OF WEALTH TAX vs. KULBIR SINGH & ORS

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WTA/30/2010HC Punjab & HaryanaPHHC01107799201006 April 2011Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL3 pages

AI SummaryRemanded

What did the High Court hold?

The High Court held that the impugned order of the Tribunal could not be sustained. The Court noted that while it had previously upheld the Tribunal's order based on the monetary limit in a prior case (WTA No.1 of 2010), a subsequent Full Bench decision of the same Court in M/s Varindera Construction Co. Baghapurana (dated February 4, 2011) had clarified that the date of filing the appeal is relevant for determining the applicability of the monetary limit. The Full Bench ruling indicated that the Tribunal's order, which dismissed the appeal on the ground of smallness of the amount, was likely erroneous in light of this clarification. On merits, the Court referred to an order passed on the same day in a related appeal (WTA No. 31 of 2010, Tara Singh v. Commissioner of Wealth Tax etc.), which had taken a view in favour of the Revenue. Consequently, the High Court set aside the Tribunal's order and remanded the matter to the Tribunal for a fresh decision on merits. The operative direction was to remand the case to the ITAT.

What were the facts?

The Revenue appealed to the High Court against an order of the Income Tax Appellate Tribunal (ITAT) dated September 1, 2009, for assessment year 2000-01. The Assessing Officer had included agricultural land, defined as 'urban land' and an 'asset' under Section 2(ea) of the Wealth Tax Act, 1957, in the assessee's taxable wealth. The Commissioner of Wealth Tax (Appeals) had set aside this addition, following its order for a prior assessment year. The ITAT then dismissed the Revenue's appeal on the ground of the smallness of the amount involved.

What were the issues?

1. Whether, on the facts and in the circumstances, the ITAT was right in dismissing the Revenue's appeal by ignoring that urban land is included in the definition of 'assets' under Section 2(ea) of the Wealth-tax Act, 1957, effective from April 1, 1993, and that its value was taxable. - Assessee: The judgment does not record any arguments from the assessee on this issue. - Revenue: The Revenue contended that urban land is an asset under Section 2(ea) and its value was taxable. 2. Whether, on the facts and in the circumstances, the ITAT was right in dismissing the Revenue's appeal without appreciating that no monetary limit is prescribed for filing wealth-tax appeals as per Instruction No. 5 of 2008. - Assessee: The judgment does not record any arguments from the assessee on this issue. - Revenue: The Revenue argued that the monetary limit for filing appeals was not applicable to wealth-tax cases, or alternatively, that the limit was not applicable on the date of filing the appeal before the Tribunal. They also argued that the limit prescribed was for Income Tax matters, not wealth tax matters.

Which sections of the Income-tax Act were involved?

2(ea), 27A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

Date of decision: 6.4.2011 Commissioner of Wealth Tax. -----Appellant. Vs. S/Shri Kulbir Singh & Rajinder Singh. -----Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. K.K. Mehta, Advocate for the appellant. --- ADARSH KUMAR GOEL, J.

This appeal has been preferred by the revenue under Section 27A of the Wealth Tax Act, 1957 (for short, “the Act”) against the order of the Income Tax Appellate Tribunal, New Delhi dated 1.9.2009 in WTA No.06/Del/09 for the assessment year 2000-01 claiming following substantial questions of law:- “(i) Whether on the facts and in the circumstances of the case, the learned ITAT was right in law in dismissing

the appeal of the Revenue by ignoring that under the provisions of section 2(ea) of the Wealth-tax Act the urban land is included in the definition of ‘assets’ w.e.f. 01.04.1993 and on merits the value of such urban land was taxable.

(ii) Whether on the facts and in the circumstances of the case, the learned ITAT was right in law in dismissing the Revenue’s appeal without appreciating that no monetary limit is prescribed for filing wealth-tax appeal as per instruction No.5 of 2008.”

The Assessing Officer included the agricultural land falling under the definition of ‘Urban land’ and ‘asset’ under Section 2(ea) for assessment under the Act. On appeal, the CWT (A) set aside the addition made following its order for the earlier assessment year. The Tribunal dismissed the appeal of the department on the ground of smallness of the amount involved.

We have heard learned counsel for the appellant.

Learned counsel for the appellant submits that the monetary limit for filing appeal was not applicable to wealth tax cases and in any case, on the date of filing of appeal before the Tribunal, the limit of `2 lacs was not applicable. Moreover, the limit prescribed is for Income Tax matters and not for wealth tax matters. Though this Court vide order dated 21.4.2010 in WTA No.1 of 2010 CWT v. Kulbir Singh and Rajender Singh applied the said limit and on that ground upheld the order of the Tribunal, rejecting the appeal on the ground of monetary limit, subsequent Full Bench in I.T.A. No.209 of 2003 The Commissioner of Income Tax III Ludhiana v. M/s Varindera Construction Co. Baghapurana decided on 4.2.2011 held that it is the date of filing of the appeal which is relevant for the monetary limit. Thus, order of the Tribunal is in conflict with the judgment of the Full Bench of this Court.

On merits, view has already been taken in favour of the revenue by order passed today in W.T.A. No. 31 of 2010 Tara Singh v. Commissioner of Wealth Tax etc.

In view of judgment of Full Bench of this Court in M/s Varindera Construction Co. Baghapurana, we are of the view that the impugned order of the Tribunal cannot be sustained and the same is set aside. The matter is remanded to the Tribunal for fresh decision on merits. It is made clear that if the assessee is aggrieved by this order, they will be at liberty to approach this Court.

The appeal is disposed of. (ADARSH KUMAR GOEL) JUDGE April 06, 2011 ( AJAY KUMAR MITTAL ) ashwani JUDGE 3

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