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Commissioner of Wealth-tax, Bombay City-ii Vs. N.A. Narielwalla - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Case NumberWealth-tax Reference No. 25 of 1971
Judge
Reported in(1980)17CTR(Bom)6; [1980]126ITR344(Bom)
ActsWealth Tax Act, 1957 - Sections 19A and 24(5)
AppellantCommissioner of Wealth-tax, Bombay City-ii
RespondentN.A. Narielwalla
Excerpt:
- - cwt [1965] 65 itr 648. as is well known, in that decision, this court had taken the view that there was no provision in the w. it is well known that consent does not give jurisdiction to any authority, the failure of the party against whom this jurisdiction has been exercised to challenge the jurisdiction does not confer jurisdiction on the said authority......with the ratio of that case as set out by the tribunal. the tribunal took the view that since the ground raised did not require any investigation into facts, the assessee should be allowed to raise the ground. having allowed the assessee to raise the ground with regard to the liability of the executors to wealth-tax in the relevant assessment year, the tribunal set aside the order of the aac and remanded the matter to him for examination of the question as to whether any assessment can be made against the executors and whether he could be made liable to the charge of wealth-tax. the question which has been referred to us now at the instance of the revenue is as follows :'whether, in the facts and circumstances of the case, the tribunal was competent to allow the assessee to raise a.....
Judgment:

Chandurkar, J.

1. The assessee in this case is the executor to the estate of late Shri A. A. Narielwalla. Though the exact date of death of late Shri A. A. Narielwalla is not known, it is not in dispute that he died sometime before 1950. We are concerned in this reference with the assessment year 1961-62 for the purpose of assessment of wealth-tax. The WTO assessed the executor to wealth-tax in respect of the estate of the deceased. The liability to assessment was upheld by the AAC. The details of the assessment are not relevant in view of the question referred to us. When the executor appealed against the order of the AAC, at the hearing the assessee sought permission to raise a new ground challenging the very liability to assessment. The ground was as follows :

'The learned Wealth-tax Officer has erred in assessing the executors in respect of the assets left by the deceased.'

2. The assessee made no secret of the fact that this ground was raised on the authority of the decision of this court in JAMNADAS v. CWT [1965] 65 ITR 648. As is well known, in that decision, this court had taken the view that there was no provision in the W.T. Act to assess the estate of the deceased to wealth-tax and that it was only later on that s. 19A of the W.T. Act was enacted with effect from April 1, 1965. It appears that the department resisted the attempt of the assessee to raise this new ground of challenge to the assessment proceedings though it is obvious that in the decision in Jamnadas's case [1965] 65 ITR 648 , the challenge went to the root of the jurisdiction of the WTO. The Tribunal found that the contention raised on behalf of the assessee did not involve any investigation into the facts and it referred to the decision of this court in Jamnadas's case : [1965]56ITR648(Bom) where, according to the Tribunal, it was held that there was no provision in the W.T. Act for charging and assessing wealth-tax in respect of the net wealth of a deceased individual beyond the financial year in which such person dies. We are really not concerned with the ratio of that case as set out by the Tribunal. The Tribunal took the view that since the ground raised did not require any investigation into facts, the assessee should be allowed to raise the ground. Having allowed the assessee to raise the ground with regard to the liability of the executors to wealth-tax in the relevant assessment year, the Tribunal set aside the order of the AAC and remanded the matter to him for examination of the question as to whether any assessment can be made against the executors and whether he could be made liable to the charge of wealth-tax. The question which has been referred to us now at the instance of the revenue is as follows :

'Whether, in the facts and circumstances of the case, the Tribunal was competent to allow the assessee to raise a fresh ground of appeal no agitated before the lower wealth-tax authorities and which was not related to the subject-matter of the appeal ?'

3. The only argument advanced on behalf of the revenue is that the Tribunal was in error in permitting the assessee to raise altogether a new ground challenging the liability to assessment. To say the least, it is difficult to appreciate the attitude on the part of the revenue to resist the contention which goes to the root of the jurisdiction of the WTO to assessee the assessee to wealth-tax. The revenue is no doubt entitled to bring such wealth to be taxed as is permissible under the provisions of the W.T. Act, but it is difficult to see how if, on the basis of the record and on established facts, it is contended by the assessee that the liability to tax is not at all attracted, such a pure question of law should not be permitted to be agitating this position, when an appeal to the Tribunal is governed by the provisions of s. 24 of the W.T. Act. The scope of the appellate jurisdiction of the Tribunal is to be found in the provisions of s. 24(5) of the W.T. Act. It provides as follows :

'24.(5) The Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, and any such orders may include an order enhancing the assessment or penalty....'

4. The jurisdiction of the Tribunal to decide the appeal brought before it by the assessee would obviously take in the legality of the proceedings which have terminated in the assessment of the assessee. It is well known that consent does not give jurisdiction to any authority, the failure of the party against whom this jurisdiction has been exercised to challenge the jurisdiction does not confer jurisdiction on the said authority. The contention which is raised before the Tribunal on behalf of the assessee was pure question of law going to the root of the jurisdiction of the WTO and the question was whether the executor can be assessed to wealth-tax in respect of the estate of the deceased in his hands in the assessment year 1961-62 before s. 19A was enacted. The contention was based on a decision of this court. The Tribunal in our view, had properly exercised its discretion in the interest of justice when it permitted the assessee to raise the point of jurisdiction before it. The question raised essentially relates to the propriety of the exercise of discretion by the Tribunal and the order of the Tribunal, out of which the reference has been made, does not seem to us to be the result of any erroneous or arbitrary exercise of jurisdiction.

5. We are hold that the contention raised on behalf of the assessee found favour not only with the Tribunal when it made the impugned order but even with the AAC who has set aside the assessment. His view has been further upheld by the Tribunal in the appeal filed by revenue. In the view which we have taken, the answer to the question referred must, therefore, be in the affirmative and against the revenue.

6. The revenue to pay the costs of this reference.


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