Commissioner of Wealth-tax vs S.V. Sivarathina Pandian

A. Subbulakshmy, J.—At the instance of the Revenue, the following question has been referred to us, viz., "whether, on the facts and in the cir cumstances of the case, the Tribunal having found that the Wealth-tax Officer adopted the -figures of valuation much lower than the proposed valuation of the Valuation Officer, was right in law in holding that the Commissioner was not justified in invoking revisional jurisdiction by act ing on material which did not form part of the record of assessment ?"

The assessee is an individual who owns several properties. The Wealth-tax Officer adopted an estimated value of Rs. 3 lakhs, Rs. 2 lakhs and Rs. 1.25 lakhs in respect of three different properties respectively as against the sums Rs. 1,06,000 Rs. 84,750 and Rs, 47,504, respectively, made in the return submitted by the assessee. The Wealth-tax Officer referred the question of valuation u/s 16A to the Valuation Officer and received tentative valuation proposals from the Valuation Officer on February 24, 1986. As the assessment was getting time barred by March 31, 1986, the Wealth-tax Officer completed the assessment on March 17, 1986, adopting the estimated figures of valuation as stated above, which were less than the figures of tentative valuation proposals. The final valuation was received by the Wealth-tax Officer on March 26, 1986, determining the valuation at higher figures. The Commissioner of Wealth-tax acting u/s 25(2) of the Act set aside the assessment directing the Wealth-tax Officer to redo the assessment adopting the correct valuation as per the valuation report. On appeal, the Tribunal set aside the order of the Commissioner of Wealth-tax, relying on the decision of the Calcutta High Court in Ganga Properties Vs. Income Tax Officer, , holding that the word "record" in Section 25(2) of the Act could not mean the record as it stood, at the time of examination by the Commissioner, but it meant the record as it stood at the time of the order passed by the Wealth-tax Officer.

The Supreme Court in the case of CIT v. Shree Manjunathesware Packing Products and Camphor Works [1998] 231 ITR 53, has held that the Commissioner of Income Tax can take into consideration the record relating to the proceedings available at the time of examination by the Commissioner of Income Tax and the record is not confined to the material available to the Income Tax Officer. Following the aforesaid decision of the Supreme Court, we hold that the Commissioner of Wealth-tax was perfectly justified in setting aside the order of assessment and directing the Wealth-tax Officer to redo the assessment taking into consideration the relevant proceedings available at the time of examination.

The order of the Tribunal is not justifiable. We answer the question referred to us in favour of the Revenue and against the assessee.