M.C. Desai, C.J.
1. These are all petitions of Raja Syed Mohammad Saadat Ali Khan for certiorari to quash assessment orders passed under the Wealth-Tax Act [No. 27 of 1957) by the Wealth-Tax Officer, Lucknow, the Appellate Assistant Commissioner and the Appellate Tribunal on appeal. The instant petition relates to assessment year 1957-58, writ petition No. 66 to assessment year 1958-59, writ petition No. 386 to assessment year 1959-60 and writ petition No. 385 to assessment year 1960-61.
2. Under Section 3 of the Act there is to be charged for every financial year a tax referred to as the wealth-tax in respect of the net wealth on the corresponding valuation date of every individual. Section 4 provides that in computing the net wealth of an individual there will be included as belonging to him the value of assets which on the valuation date are held by his wife, minor children, etc. Under Section 5 wealth tax is not payable by an assessee in respect of certain assets and they are not to be included in his net wealth. Assets are defined in Section 2(e) to include property of every description, movable or immovable, but not to include 'agricultural land and growing crops, grass or standing trees on such [and' (and certain other properties with which we are not concerned in these petitions). Net wealth is defined in clause (m) to mean 'the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets .... ...... belonging to theassessee on the valuation date ......... is in excessof the aggregate value of all the debts, owed by the assessee on the valuation date other than ...... . .(ii) debts which are secured on, or which have been incurred in relation to, any asset in respect of which wealth-tax is not payable under this Act' and certain othar debts with which we are not concerned in these petitions. A Wealth-tax Officer is authorised by Section 16 to assess the net wealth of an assessee and determine the amount payable by him as wealth-tax. Any person objecting to the amount of his net wealth determined, of the amount of wealth-tax assessed, under the Act may appeal to the Appellate Assistant Commissioner, vide S. 23.
Any assessee objecting to an order passed by an Appellate Assistant Commissioner under Section 23 may appeal to the Appellate Tribunal 'within sixty days of the date on which he is served with notice of such order', vide Section 24. Section 25 lays down that the Commissioner may, either of his own motion or on application made by an assessee in this behalf, call for the record of any proceedings under the Act in which an order has been passed byany subordinate authority and may pass such order as he thinks fit. This provision is subject to the conditions that he cannot revise any order where an appeal against it lies to the Appellate Assistant Commissioner or the Appellate Tribunal and the time within which it can be made has not expired 'or in the case of an appeal to the Appellate Tribunal the assessee has not waived his right of appeal' and that where an application has been made by an assessee under Section 25 the order cannot be revised unless the application is made 'within one year from the date of the order sought to be revised or within such further period as the Commissioner may think fit to allow on being satisfied that the assessee was prevented by sufficient cause from making the application within that period'. Section 27 contains provisions analogous to those of Section 66 of the Income-tax Act and Section 29, analogous to those of Section 66A of the Income-tax Act.
3. In the instant petition the assessment order under Section 16 was passed on 16-2-1959, an appeal against it was decided by an Appellate Assistant Commissioner under Section 23 on 17-9-1959 and a revision application by the Commissioner under Section 25 on 16-2-1961. In writ petition No. 66 the assessment order was made on 18-2-1959 and an appeal from it was decided by the Appellate Assistant Commissioner on 17-9-1959, and a revision application by the Commissioner on 16-2-1961. In petition No. 386 the assessment order was passed en 25-1-1960, an appeal from it was decided by the Appellate Assistant Commissioner on 20-4-1961, a copy of his order was served upon him on 20-5-1961, he applied under Section 25 to the Commissioner for revising it on 1-6-1962 and the Commissioner on 31-8-1962 dismissed the application as barred by time. In petition No. 385 the assessment order was made on 24-3-1961, the notice of demand was served on 27-5-1961, no appeal was filed from it, an application under Section 25 for revision of it was made to the Commissioner on 1-6-1962 and it was dismissed on 31-8-1962 as barred by time. These are the orders that are sought to be quashed.
4. The orders of the Wealth Tax Authorities (e. g. Wealth Tax Officer, Appellate Assistant Commissioner and Commissioner of Wealth Tax) are impugned mainly on two grounds, (1) that the value of the zamindari abolition compensation bonds should not be included in the net wealth of the petitioner and (2) that the net wealth should be reduced by the amount of the arrears of the Agricultural Income Tax due from him to the State Government. The relief sought is certiorari to quash the order of the Wealth Tax Authorities and mandamu's requiring them to exclude from consideration the value of the zamindari compensation bonds when calculating the net wealth of the petitioner and to deduct from it the amount outstanding against the petitioner on account of the Agricultural Income Tax and to refund the excess Wealth Tax realised from him. The grounds on which the reliefs are based are that the Wealth Tax Authorities have 'acted illegally and contrary to law' and 'mala fide' and that the petitioner has no other specific and adequate remedy.
5. The Wealth Tax Authorities are all departmental officers performing their duties under orders, instructions and directions of the Central Board of Revenue, vide Section 13. When performing their duties under the Act the Wealth Tax Officers and the Commissioners act neither judicially nor quasi-judicially but administratively. The nature of their duties is similar to that of the duties performed by departmental officers under the Income-tax Act, and it has been settled that the latter act administratively andnot quasi-judicially. In Additional Income-tax Officer v. Cuddapah Star Transport Co. : 40ITR200(AP) , Chandra Reddy, C. J and Narasimham, J. observed at pags 205 that an order passed by the Commissioner of Income-tax on revision under Section 33A of the Income-tax Act is of administrative character and outside the purview of Article 226 of the Constitution. They said at page 207 :
'This section created only an administrative machinery by which the Commissioner is empowered to rectify anymistake committed by the departmental officials. It is not couched in a language which is calculated to create any right in an assessee or define the limits of such a right.'
They contrasted the provisions of Section 33A with those of Section 33B and held that the Commissioner acts quasi-judicially when exercising the powers under Section 33B. At page 208 they laid down that an order passed by the Commissioner under Section 33A is not amenable to certiorari. In Edara Venkaiah v. Commissioner of Income-tax Department Hyderabad : 35ITR24(AP) , which was relied upon by them, Jaganmohan Reddy, J. had observed that Section 33A vests in the Commissioner revisional power to be exercised in his administrative capacity. The same view was taken by Sinlia, J. in Sitalpore Colliery Concern Ltd. v. Union of India : 32ITR26(Cal) . The learned Judges in these cases supported their view by relying upon Commissioner of Income-tax, West Punjab, North West Frontier and Delhi - Provinces, Lahore v. Tribune Trust, Lahore , in which Lord Simonds, speaking for the Judicial Committee, laid down the following three propositions;
(1) An assessment order duly passed by an Income-tax Officer is not a nullity merely because it would have teen set aside if challenged in due time.
(2) The only remedies open to the tax payer, whether in regard to appeal against assessment or to claim for refund, are to be found within the four corners of the Act. It is the Act which prescribes both the remedy and the manner in which it may be enforced.
(3) Section 33 of the Income-tax Act does not create any right in the assessee and does not confer general relief, his specific right being that of appeal against the assessment which is subject' to its own time limit and cannot be enlarged by taking a course which is on his part purely voluntary.
In Sreenivasalu Naidu v. Commissioner of Income-tax : 16ITR341(Mad) Subba Rao, J. stated that the remedy by way of revision under Section 33A is an alternative to the remedy of appeal provided by Section 33 and that an assessee can either prefer an appeal to the Appellate Tribunal or select the cheaper remedy and apply to the Commissioner to revise the order, but it does not follow that applying for revision is a matter of right as appealing is and that the Commissioner exercising revisional jurisdiction acts quasi judicially because the Income-tax Appellate Tribunal, if appealed to instead, would have acted judicially. From the fact that one remedy is an alternative to the other remedy if cannot be said that the two remedies are of the same nature, i.e. if one is a matter of right the other also is.
6. The State Government's deciding that a certain land was required for a public purpose within the meaning of Section 3 of the Bombay Land Requisition Act No. 5 of 1947 was held by the Supreme Court in Province of Bombay v. Khusaldas S. Advani : 1SCR621 , to be an administrative decision not liable to be quashed by certiorari. Kania, C. J., accepted that a judicial or quasi-judicial authority is one that has a legal authority to determine questions affecting rights of subjects and has a duty to act judicially (p. 631) and observed that 'the true position is that when the law under which the authority is making a decision itself requires a judicial approach the decision will be quasi-judicial' (p. 633J. He found no judicial element in the decision of the State Government as to the land being required for a public purpose. Fazl Ali, J. concurring, laid stress on the manner in which the decision has to be arrived at. This decision was followed in Radheshyam v. State of Madhya Pradesh : 1SCR1440 and Das, C. J. stated that the three requisites of a quasi-judicial act are that (1) a body of persons has legal authority, (2) it is to determine questions affecting the rights of parties and (3) it must have the duty to act judicially. The Supreme Court held in that case that an order passed by a State Government under Section 53A of the C. P. and Berar Municipalities Act was an administrative and not a quasi judicial order. The order there was of appointment of a servant of the Government as an Executive Officer of the Municipal Board on the grounds that the Board was not competent to perform the duties imposed upon it or undertaken by it by or under the Act and that the State Government considered that a general improvement in the administration was likely to be secured by the appointment of a Government servant as the Board's Executive Officer. Whether a general improvement in the administration was likely to be secured by such an act or not was a matter left to the subjective determination of the State Government. But the other fact that the Board was incompetent also was not required to be determined judicially. There was no indication in Section 53A as to the manner or mode in which this fact was to be determined. No form of procedure was laid down from which it could be inferred that the State Government had a duty to act judicially.
7. The power conferred upon a Commissioner by Section 25 of the Wealth Tax Act does not require any judicial approach. He is empowered to make such enquiry as he thinks fit or to cause such enquiry to be made. He is empowered to pass such order as he thinks fit, the only restriction upon his power being that he must not contravene any provisions of the Act or pass an order prejudicial I to the assessee. His function is no more quasi judicial I than that of a Wealth Tax Officer. Calling for the record' is required only for assuming revisional jurisdiction; how he should deal with the matter after assuming jurisdiction is not subject to any restriction other than those mentioned above. Thus he is not required to act quasi judicially expressly or even by necessary implication. A Wealth Tax Officer also acts administratively when passing an assessment order under Section 16. He is required to hear such evidence as is produced by the assessee, but he is not required to deal with the matter judicially. How he should assess the net wealth is left at his discretion. He is required only to hear the evidence: the Act lays down nothing indicating how to connect the assessment order with the evidence heard and accepted as true by him. He has to act under instructions and orders of the Commissioner, which suggests that he acts administratively. There is to lis before him. He acts as an agent of the Government, that is to realise the tax from the assessee. He does not act as a judge in a dispute between two persons affecting their rights and liabilities, because neither are there two parties before him nor is there a dispute between parties. Whatever he decides is a dispute between himself and theassesses; if there is any party in opposition to the assessee it is he himself. If a person deciding a dispute acts as the other party, it necessarily means that he does not act judicially or quasi judicially.
8. The facts in Shivji Nathubhai v. Union of India : 2SCR775 were materially different. There the Union Government reviewed an order granting a lease to the appellant at the instance of the contesting respondent whose application for a lease had been rejected and the Supreme Court held that the Union Government acted quasi judicially in dealing with the review application and could not review the order without hearing the appellant. There were undoubtedly two parties before the Union Government when disposing of the review application, (1) the appellant and (2) the respondent and there was a lis to be decided by the Government.
9. An order passed under Section 680 of the Motor Vehicles Act was held to be a quasi judicial order in Nageswara Rao v. A. P. S. R.T. Corporation : AIR1959SC308 the Supreme Court found that there were a proposal and an opposition and that the State Government by passing the order decided the lis and held that prima facie it should act judicially. Where an Examination Committee of the Board of High School and Intermediate Education, U. P., decides that an examinee used unfair means in an examination hall it acts quasi judicially, as held in Board of High School and Intermediate Education. U. P. v. Ghanshyam Das Gupta : AIR1962SC1110 but the Supreme Court did not lay down any new principle and only applied the principles laid down in the cases of Kusaldas S. Advani : 1SCR621 Radeshyam : 1SCR1440 and Shivji Nathubhai : 2SCR775 to the facts of the case. The question before us is of applying the same principles to the facts of the instant case which surely cannot be governed by the manner in which they were applied to a different set of facts. When the Board of the Revenue, U. P. adjudges under Section 56(2) of the Stamp Act the nature of a document and the stamp duty payable thereon it acts judicially as held in Board of Revenue U. P. Allahabad v. Sardarni Vidyawati : AIR1962SC1217 . The reasons given are that the decision involves the construction of a document which is a pure question of law and that the decision affects the liability of the executant of the document inasmuch as he may be required to pay further stamp duty. It cannot be disputed that in deciding a pure question of law the approach must be strictly judicial. This decision is, therefore, of no assistance in the present case.
'It is ....... well settled that certiorari will notlie to correct the errors of a statutory body which is entrusted with purely administrative functions' (Das, C. J. in the case of Radeshyam AIR 1959 AC 107). Certiorari or prohibition cannot be issued when alternative remedy exists or to by-pass the departmental machinery or remedy. Shah, J. laid down in C. A. Abraham v. Income-tax Officer Kottayam : 41ITR425(SC) 'The Income-tax Act provides a complete machinery for assessment of tax and imposition of penalty and for obtaining a relief in respect of any improper orders passed by the Income-tax authorities, and the appellant could not be permitted to abandon resort to that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Tribunal.'
Falshaw and Kapur, JJ. in Bharam Chand and Bros. v. Excise and Taxation Commissioner referred to the dictum in Anne Besant v. Advocate General of Madras, ILR 43 Mad 146 : AIR 1919 PC 31 of Lord Phillimore tothe effect that 'Certiorari according to the English rule is only to be granted where no other suitable remedy exists', and said that an application for a writ so as to short-circuit the procedure provided by the Punjab Sales Tax Act was not allowable. In Raleigh Investment Co. Ltd. v. Governor-General in Council, 74 Ind App 50 : AIR 1947 PC 78 Lord Uthwatt observed at page 65 (of Ind App) : (at p, 81 of AIR):
'Jurisdiction to question the assessment otherwise than by use of the machinery expressly provided by the Act would appear to be Inconsistent with the statutory obligation to pay arising by virtue of the assessment.'
In the Tribune Trust Case Lord Simonds said at page 224:
'The only remedies open to the taxpayer, whether In regard to appeal against assessment or to claim for refund, are to be found within the four corners of the Act .... It is the Act which prescribes both the remedy and the manner in which it may be enforced.'
In the matter of Lachhman Das Kapur and Soni, JJ. reviewed several authorities and took the same view. Kapur, J. observed at page 65:
'A particular machinery has been set up under the' Act 'by the use of which alone' total assessable income for the purposes of the Income-tax Is to be ascertained and jurisdiction to question the assessment otherwise than by the use of this machinery is incompatible with the scheme of the Act. The challenge of the action of the Income-tax Officer by a writ of prohibition or mandamus is, therefore, not available to the assessee.'
At page 66 he referred to Rex v. Inspector of Taxes, 1923-8 Tax Cas 327 where the existence of a provision for an appeal was held to bar prohibition. Soni, J. pointed out at page 68 that mandamus is meant to supplement and not supersede legal remedies and that its office is to promote the proper administration of justice by the duly constituted Tribunals and it is not intended to by-pass them. Falshaw and Kapur, JJ. approved of the above two decisions in Kandhari Oil Mills v. Excise and Taxation Commissioner . In the case of : 35ITR24(AP) the assessee did not appeal from the assessment order but applied in revision after the expiry of the period for filing an appeal and lost and the High Court of Andhra Pradesh, held that he could not apply for certiorari against the order passed by the Commissioner in revision.
10. In this petition and in the associate petitions no appeals were filed by the assessee from the orders of the Appellate Assistant Commissioner to the Appellate Tribunal; in Writ Petition No. 385 he did file an appeal even from the order of the Wealth Tax Officer to the Appellate Assistant Commissioner and the only reason given by him is that he knew of the order late and in the other petitions he pleaded that his right of appeal to the Commissioner had become barred by time on account of illness. In Petition No. 385 the Commissioner rejected the revision application on the ground that it was barred by time and the assessee had not applied for condonation of the delay. He added, after dismissing it as time-barred, that 'on merits too, there is no force in the assessee's contentions, It was improper for the Commissioner to say anything on the merits after dismissing the revision application as barred by time because an application cannot be dismissed both on the grounds that it is barred by time and that it has no force. If an application is barred by time, the law prohibits the authority to whom it is made from considering it on merits and, consequently, the Commissioner hadno jurisdiction to go into the merits after his finding that the application was barred by time and reject it on that ground. His order will, therefore, be treated as an appeal dismissing the application as barred by time. The appellant failed to avail of the remedy provided to him by the Act and is not entitled to certiorari for the quashing of the assessment order. An alternative and adequate- remedy was open to him if he was aggrieved by it and he should have filed an appeal to the Appellate Assistant Commissioner. A revision application was not an adequate remedy because the Commissioner's jurisdiction in revision is discretionary. It will be a good exercise of the discretion vested in this Court to refuse certiorari against the assessment order on this ground alone. As regards certiorari against the Commissioner's order is concerned, there is absolutely nothing wrong in it. The revision application was admittedly barred by time and the assessee did not even pray for being allowed further time and, when he did not pray, there was no question of his having made out sufficient cause for not applying within one year.
A grievance was made of the fact that the Commissioner dismissed the revision application without giving any notice to the assessee and hearing him, but the Commissioner was not bound to do so. He was not bound to revise the order and, therefore, was not required to hear the assessee before refusing to do so. Secondly, the assessee himself went to him with an application and must have stated in it all that he wanted to say; therefore, he could not say that he was not heard. The argument that he was not heard is open to the party against whom an application is made and an order is passed and not to the person applying to the authority. Lastly, the assessee could not say that the order refusing to hear his revision application was an order adverse to him the Commissioner did not place in a worse position than he was in before; not granting the relief sought by him does not amount to passing an order adverse to him. A hearing is required when an adverse order is to be passed against the party to be heard; refusing to grant a relief on an application does not amount to passing an order adverse to the applicant.
11. In the case of Tribune Trust the Judicial Committee observed that when a Commissioner refuses to exercise his powers of Section 33 of Income-tax Act and does not set aside an assessment order he does not act prejudicially to the assessee and that an order is prejudicial to the assessee only when he is placed in a worse position than before it was made. In Sardarni Vidyawati's : AIR1962SC1217 case the applicant before the Board of Revenue was the Chief Inspector of Stamps and not the party that was aggrieved by the order passed by the Board of Revenue and, therefore, the assessee cannot derive any help from the decision in that case. No certiorari can, therefore, be issued against the Commissioner's order. In Petitions Nos. 65 and 66 the assessee failed to avail himself of the adequate alternative remedy of appeal to the Appellate Tribunal from the orders of the Appellate Assistant Commissioner; that he was ill was no justification. Under Section 24(3) the Tribunal had power to admit appeals even after the expiry of the prescribed period if it was satisfied that there was sufficient cause for Rot presenting them within sixty days, Therefore, he could never be justified in filing revision applications instead of appeals to the Appellate Tribunal. The revision applications were no substitute for the appeals that he should have filed. Further, he could not file a revision application to the Commissioner without waiving his right of appeal to the Appellate Tribunal, vide proviso (a) to Section 25, He had not waived his right of appeal in these two cases.I am not prepared to accept the contention that he must be deemed to have waived his right. If in every case a revision application is filed without an appeal having been filed before the Appellate Tribunal the person is to be deamed to have waived his right of appeal, the proviso would become meaningless. The proviso must not be treated as superfluous and must be given full effect' and it can be given full effect only by requiring actual waiver of the right of appeal. It would not be permissible for this Court to indulge in any legal fiction. It was contended on behalf of the assessee that the question of waiver is relevant only when the time for filing an appeal to the Appellate Tribunal has not expired, but 1 do not agree. Provist (a) reads as follows:
'the Commissioner shall not revise any order ......in any case
(a) where an appeal against the order lies to the Appellate Assistant Commissioner or to Appellate Tribunal, the time within which such appeal can be made has not expired or in the case of an appeal 1o the Appellate Tribunal the assessee has not waived his right of appeal;' This means that the Commissioner shall not revise an order of an Appellate Assistant Commissioner if the time for as appeal from it to the Appellate Tribunal has not expired and that he will not revise his order if the assessee has not waived his right of appeal. The word 'or' in the proviso has the effect of 'and'; in neither of the two circumstances joined by the word 'or' in the proviso can the Commissioner revise an order. Both circumstances must be absent in order that he has the power to revise an order. This is the literal interpretation of the proviso, but there is much force in the contention that the legislature did not contemplate this result. What it seems to have contemplated is that an assesses should not have a right to approach the 'Commissioner during the continuance of his right to file an appeal unless he has waived his right of appeal. The question of waiving the right to appeal can arise only while it exists and cannot arise if it has become barred by time. The draftsman did not realise the significance of joining the two clauses with 'or' in a negative sentence; he did not realise that in this context the word 'or' performs the function of 'and'. When there is a bar imposed in one circumstance or another, it means that the act barred cannot be done if either circumstance exists. Here one circumstance, namely that the assessee has not waived his right of appeal exists, and, therefore, the bar imposed on the Commissioner's power to revise exists and he could not revise the order. In Writ Petition No. 396 the assesses filed an application in revision instead of an appeal to the Appellate Tribunal and the revision application was dismissed without his being heard and without his being informed of the date of hearing. It was dismissed as barred by time. Though the Commissioner added that 'on merits too, there is no force' he must be deemed to have dismissed, the application on the ground that it was barred by time. There was nothing wrong in the order passed by him and the assessee is not entitled to certiorari when he did not avail himself of the remedy of appeal to the Appellate Tribunal.
12. Certiorari lies only on the ground of lack or excess of jurisdiction or of manifest error of law on the face of the record and not to correct mere errors of law. That an order is invalid and may be set aside on appeal does not mean that it is without jurisdiction; this is made clear by the Privy Council in . What is a manifest error of law has been explained by the Supreme Court in Satyanarayan Laxminarayan v. Mallikarjun Bhavanappa : 1SCR890 . Das Gupta, J. said at page 901 (of SCR) : (at pp. 141-142 of AIR) ;
'An error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions can hardly be said to be an error apparent of the face of the record. As the above discussion of the rival contentions show the alleged error in the present case is far from self-evident and if it can be established, it has to be established by lengthy and complicated arguments. We do not think such an error can be cured by a writ of certiorari according to the rule governing the powers of the superior court to issue such a writ.'
He laid down that when an inferior Tribunal wrongly holds that no order for possession can be made unless a notice terminating the tenancy has been given and therefore refuses the relief it does not commit any manifest error of law. 1 respectfully disagree with, the observation of Sinha, J. in Anglo India Jute Mills Co. Ltd. v. S. K. Dutt : 30ITR525(Cal) that when an Income-tax Officer wrongly construes certain provisions of the Income-tax Act he commits an error of law on the face of the record liable to be set right by certiorari. The whole basis of the learned Judge's observation was 'It is somewhat difficult to see how an error of law could be an error not patent on the face of the record. I suppose what it means is that if a point of law is dependent on disputed questions of fact, then if the facts are not patent, the error in law cannot be corrected (p. 453). This view must be deemed to have been overruled by the decision in Satyanarayan's case : 1SCR890 . In Joti Prasad Agarwal v. Income-tax Officer (B) Ward Mathura : 37ITR107(All) Bhargava and Takru, JJ. held that when an Income-tax Officer passes an assessment order against an association of persons, even though the members of the association had already been assessed on the incomes received by them, it is a question of jurisdiction. With great respect I am unable to agree. The Income-tax Officer had jurisdiction to assess the association to Income-tax and to determine if it was liable to be assessed. If on an interpretation of certain provisions of the Act it was not liable to be assessed, it does not mean that the Income-tax Officer had no jurisdiction over it. If he committed any error of law in the exercise of his jurisdiction, it did not mean that he acted without jurisdiction. The view taken by the learned Judges being contrary to that taken by the Privy Council in the Tribune Trust case cannot be accepted as correct. The learned Judges then observed that the Income-tax Officer committed a manifest error apparent on the face of the record by assessing the association on the income on which its members had been assessed, in ignorance of the provisions of Section 3 and in disregard of their effect. Section 3 does not prohibit a second assessment on the same income and, as far as the effect of the provisions is concerned, it is a matter of argument. The view taken by the learned Judges must be deemed to have been overruled in Satyanarayana's case : 1SCR890 . In Rai Krushna Bose v. Binod Kanungo : 1SCR913 the Supreme Court did quash by certiorari an error of law which could not be said to be apparent on the face of the record but without any discussion of its nature.
13. The assessee has two objections against the assessment orders in these cases. One is that the Wealth Tax Officer has included in his net wealth the value of zamindari abolition compensation bonds even though they were 'appropriated at source by the Agricultural Income-taxAuthorities against the recovery of the said tax' and they were never received by him. What happened is that there was Agricultural Income-tax due from the assessee and the Compensation Officer at the request of the Board of Revenue kept the bonds with him as security for the payment of the tax. They were neither appropriated nor even attached and they remained the assessee's property. His title was not affected by what the Compensation Officer did; they did not become somebody else's property. Being his property they are his assets; neither are they excluded from the definition of assets, nor are they included among assets exempted from Wealth Tax liability by virtue of Section 5, nor is their value required not to be included in his net wealth. It is immaterial that they never came into his possession, because a person can own property without being in possession of it. The position taken by the assessee is anomalous. He wants the Agricultural Income-tax to be treated as a debt to be deducted from his assets but does not want the bonds that have been kept for security for payment of the debt to be treated as his property. The Wealth Tax Officer and the Appellate Assistant Commissioner were right in treating the bonds as the assessee's assets. Even if they were wrong it cannot be said that they were manifestly wrong and, therefore, their orders cannot be quashed by certiorari
14. The other question is whether the exception (ii) to Section 2(m) applies to the arrears of the Agricultural Income-tax due from the assessee. It must be accepted that arrears of Agricultural Income-tax amount to a debt within the meaning of Section 2(m). Exception (ii) applies to debts that are 'secured on, or which have been incurred in relation to, any asset in respect of which wealth-tax is not payable under this Act.' It was contended on behalf of the assessee that the exception does not apply to the arrears of Agricultural Income-tax because they are neither secured on any asset in respect of which wealth tax is not payable nor have been incurred in relation to any such asset. For the applicability of the exception there must be an asset and wealth tax must not be payable on it; if a debt is secured on, or incurred in relation to, something which is not an asset at all, the exception does not apply. Now agricultural land is not an asset at all, it is expressly excluded from the definition of assets, vide Section 2(e)(i). Assets in respect of which wealth tax is not payable are only those assets which are mentioned in Section 5; they come within the meaning of assets but wealth tax is declared to be not payable on them. Wealth Tax is not payable on agricultural land, but this is because it is not an asset at all and not because it is an asset excluded from the liability of wealth tax under Section 5. The Wealth Tax authorities do not rely upon any provision of Section 5 and cannot rely upon the exception. The other condition required for the applicability of the exception also is wanting inasmuch as the arrears of Agricultural Income Tax cannot be said to be secured on, or to have been incurred in relation to, agricultural land. The U. P. Agricultural Income Tax Act No. 3 of 1949 does not contain any provision charging agricultural land with the payment of Agricultural Income Tax. Section 30 of the Act lays down that if the tax is not paid within the time allowed the assessee will be in default. When on assessee is in default the assessing authority may inflict a penalty upon him under Section 31. Section 32 authorises the Collector to recover the tax due from an assessee who is in default as if it were an arrear of land revenue. These are all the provisions with regard to the recovery of Agricultural Income Tax. The mere fact that the arrears may be recovered by the Collector as if they were arrears of land revenue does not make them arrears of land revenue and does not make them a charge upon agricultural land just as payment of land revenue is a charge upon the land on which it is assessed. The Wealth Tax Authorities were not serious in contending that Agricultural Income Tax was secured on agricultural land but were serious in contending that arrears of the tax had been incurred in relation to an asset. By asset they meant agricultural land, but, as I pointed out, agricultural land is not an asset. Therefore, even if the arrears could be said to have been incurred in relation to agricultural land, exception (ii) does not apply to them. Agricultural Income Tax is payable on income of agricultural land and not on agricultural land itself, while Wealth Tax is payable on the capital value of the assets, exclusive of agricultural land. Wealth Tax is covered by item No. 86 of the Union List 'Taxation on the capital value of the assets, exclusive of agricultural land, of individuals', whereas Agricultural Income Tax is covered by item No. 46 'Taxation on agricultural income' of the State List. Agricultural income is not an asset and, consequently, while arrears of Agricultural Income Tax may be said to have been incurred in relation to agricultural income, they cannot be said to have been incurred in relation to any asset. Even if it were true that agricultural income is an asset the exception will not apply because there is no provision in the Wealth Tax Act making agricultural income not taxable. I am, therefore, of the opinion that in calculating the assessee's net wealth the arrears of agricultural income tax due from him must he included in the aggregate value of the debts owed by him. I am unable to appreciate the reason given by the Commissioner of Wealth Tax that 'since agricultural lands are not to be included in the assessee's net wealth, the agricultural income-tax dues cannot be allowed as a deduction as provided in Section 2(m)'. The Commissioner should have considered whether the arrears are a debt and, if so, whether it is a debt covered by exception (ii). He could have refused to deduct the amount of the arrears from the value of the assets only if they fell within exception (ii). Practically the same reason has been given by the Appellate Assistant Commissioner. Though I find that the arrears do not fall within exception (ii) I must say that the matter is not so very clear that it can be said that the Wealth Tax Authorities have committed such a manifest error of law that they can be said to have exercised jurisdiction not vested in them or refused to exercise jurisdiction vested in them. The view that they took has been taken by them deliberately and after considering the assessee's arguments. It cannot be said that they overlooked any provision of the law; their error lies in the reasoning and this error is not amenable to certiorari. This Court's duty is confined to seeing that they remain within their jurisdiction and do not refuse to exercise jurisdiction vesting in them and does not extend to correcting errors arising from faulty reasoning in the exercise of their jurisdiction.
15. In the result I would dismiss this petition but without any order as to costs because the assessee has succeeded on some issues.