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S. Gurdial Singh Vs. Wealth-tax Officer - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Delhi
Decided On
Judge
Reported in(1983)6ITD305(Delhi)
AppellantS. Gurdial Singh
RespondentWealth-tax Officer
Excerpt:
.....said passage was quoted with approval in esthuri aswathiah v. cit [1967] 66 itr 478. in the bombay high court, referred to above, which has been approved by the supreme court, it has been held that when a reference is made to the high court either under section 66(1) or section 66(2) of the act the decision of the tribunal cannot be looked upon as final ; in other words, the appeal is not finally disposed of.it is only when the high court decides the case, exercises its advisory jurisdiction, and gives directions to the tribunal on questions of law, and the tribunal reconsiders the matter and decides it, that the appeal is finally disposed of. he then referred to the judgment in the case of s.c. cambatta & co. (supra), wherein it has been held that an appeal before the tribunal is.....
Judgment:
1. In the statement of the case dated 7-5-1977 in RA Nos. 526 to 533 (Delhi) of 1976-77 arising out of WT Appeal Nos. 948 and 949 (Delhi) of 1974-75 and 340 to 345 (Delhi) of 1975-76 pertaining to the assessment years 1962-63 to 1969-70, the following question of law was referred to the Hon'ble High Court of Delhi : Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee was entitled to have a second opportunity in terms of Sub-section (5) of Section 16 of the Wealth-tax Act, 1957, and on that ground setting aside the orders of the authorities below and restoring the cases to the WTO to reframe the assessments By its judgment dated 4-3-1980 reported in CWT v. Gurdial Singh [1980] 123 ITR 483 (Delhi) the High Court has answered the question in the negative and against the assessee. The High Court has also further held that the Tribunal should have proceeded to consider whether the assessments under Section 16(5) of the Wealth-tax Act, 1957 ('the Act') were supported by the materials on record or not. As directed by the High Court, the hearing was fixed for going into the propriety and fairness of the estimates computed by the wealth-tax authorities.

2. When these matters came up for hearing on 6-9-1982, the learned counsel for the assessee made a written prayer seeking permission to withdraw all the appeals pertaining to the assessment years 1962-63 to 969-7O in order to enable him to move the Settlement Commission.

According to the counsel for the assessee, this application was being made under Section 22M(2) of the Act. Section 22M was, inter alia, inserted by the Taxation Laws (Amendment) Act, 1975, with effect from 1-4-1976. The order of the Tribunal against which the aforesaid question of law was referred to the High Court is dated 17-6-1976.

3. In support of the submission that the assessee's application under sectio n 22M(2) should be allowed, the learned counsel for the assessee first referred to the judgment in East India Corpn. Ltd. v. CIT [1975] 99 ITR 287 (Mad.) at page 294 wherein after referring to the Supreme Court judgment in CIT v. Jubilee Mills Ltd. [1968] 68 ITR 630, the High Court observed that when a reference is made to the High Court under Section 66 of the Indian Income-tax Act, 1922, the finality attached to the decision of the Tribunal is set at large. It is only when the Tribunal disposes of the appeal afresh in conformity with the decision of the High Court, the appeal is finally disposed of. When disposing of the appeal conformably to the decision of the High Court, the Tribunal exercises its appellate powers under Section 33 and the order made is also one falling under Section 33(4). Therefore, all the powers of the Tribunal that could have been exercised by it at the time of the original hearing of the appeal could also be exercised while disposing of the appeal after the decision of the High Court. He then referred to the judgment in CWT v. Tungabhadra Industries Ltd. [1970] 75 ITR 196 (SC) at page 201, wherein an extract has been given from the judgment of the Bombay High Court in ITAT v. S.C. Cambatta & Co. Ltd. [1956] 29 ITR 118, 120 and then it has been . observed by the Supreme Court that the said passage was quoted with approval in Esthuri Aswathiah v. CIT [1967] 66 ITR 478. In the Bombay High Court, referred to above, which has been approved by the Supreme Court, it has been held that when a reference is made to the High Court either under Section 66(1) or Section 66(2) of the Act the decision of the Tribunal cannot be looked upon as final ; in other words, the appeal is not finally disposed of.

It is only when the High Court decides the case, exercises its advisory jurisdiction, and gives directions to the Tribunal on questions of law, and the Tribunal reconsiders the matter and decides it, that the appeal is finally disposed of. He then referred to the judgment in the case of S.C. Cambatta & Co. (supra), wherein it has been held that an appeal before the Tribunal is not finally disposed of whenever there is a reference to the High Court. What the Tribunal does after the High Court has heard the case is to exercise its appellate powers under Section 33 and the final decision in the appeal can, therefore, be given only after the disposal of the reference, and that too only under Section 33(4). He then referred to the judgment in L. Bansi Dhar & Sons v. CIT [1978] 111 ITR 330 (Delhi), wherein it has been observed as under : ... No doubt, as pointed out by the Supreme Court in CWT v. Tungabhadra Industries Ltd. [1970] 75 ITR 196, 201, referring to the observations of Chagla, C.J. of the High Court of Bombay in ITAT v. S.C. Cambatta & Co. Ltd. [1956] 29 ITR 118, 120, when a reference has been made to the High Court or the Supreme Court, the decision of the Appellate Tribunal out of which the reference has arisen cannot be looked upon as final ; in other words, the appeal before it is not finally disposed of, and it is only when the High Court or the Supreme Court decides the questions that have been referred, the Tribunal reconsiders the matter and decides it and thus finally disposes of the appeal . . . .

The learned departmental representative resisted the application for withdrawal of the appeals and submitted that the assessee should not be allowed to withdraw the appeals at this stage.

4. We have carefully considered the rival submissions. We do not dispute the proposition of law laid down in the aforesaid judgments cited on behalf of the assessee. But we do not accept the assessee's submission for withdrawing the appeals under Section 22M(2) at this stage. The assessee could have certainly withdrawn his appeals under Section 22M(2) before these appeals came to be decided on 17-6-1976 because, as already stated, the provision of Section 22M(2) had already come on the statute book with effect from 1-4-1976. If the assessee is now allowed to withdraw the appeals, the result would be that the order of the Tribunal dated 17-6-1976 would become null and void and similar would be the position of the judgment dated 4-3-1980 delivered by the High Court itself. When the assessee's request for withdrawing the appeals at this stage can have the effect of even making the judgment of the High Court ineffective, we cannot permit the assessee to withdraw the appeals. After the references submitted to the High Court have been answered by the Hon'ble High Court, our duty is to dispose of the case conformably with the judgment of the High Court. Conformably with the judgment of the High Court, therefore, we would now proceed to go into the propriety and fairness of the estimates made by the lower authorities.

5 to 12. [These paras are not reproduced here as they involve minor issues.]


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