Per Shri T. V. Rajagopala Rao, Judicial Member - The appeals are filed by the revenue whereas the cross-objections are by the assessees. Again the miscellaneous petitions are by the assessees. Therefore, these are taken up together for the sake of convenience.
2. Shri Sai Reddy is the father of Shri Sanjeeva Reddy. The file bearing 815-S/NC started on the basis of compensation received under the Land Acquisition Act, 1894.
3. Notice dated 19-11-1975/20-11-1975 under section 14(2) of the Wealth-tax Act, 1957 (the Act) was served on Shri Sai Reddy requesting him to file the true and correct statement of his assets as on the relevant valuation date for the assessment year 1975-76. This was received by Shri Sai Reddy on 6-12-1975. On 31-12-1975 he filed from of declaration duly filed in under section 15(1) of the Voluntary Disclosure of Income and Wealth Act, 1976 (VD Act) addressed to the Commissioner. He filed the voluntary disclosure in Form No. C prescribed under the section 14 for the assessment year 1975-76. In that he had returned total net wealth of of Rs. 16,58,776.33 for the assessment year 1975-76. He had paid an amount of Rs. 54,360 on 30-12-1975 under the VD Act. The return was filed by Shri Sai Reddy as an individual.
4. So also, Shri Sanjeeva Reddy filed a declaration under the VD Act under the provisions of section 15(1). He also filed a return in Form No. C accompanied by a regular return under the Act for the assessment year 1975-76. The declaration filed under the provisions of the VD Act is addressed to the Commissioner who in his turn had forwarded them before the WTO for completing the assessment.
5. Further, the HUF constituted by Shri Sai Reddy and Shri Sanjeeva Reddy was also assessed to wealth-tax for the assessment year 1975-76.
Both Shri Said Reddy and Shri Sanjeeva Reddy contended during the assessment proceedings of the HUF that there was an oral partition between them on 10-12-1970 and subsequently a suit for partition was also filed in the Court of Fifth Additional Judge, City Civil Court in SO No. 573 of 1975. It is only subsequent to the claim for partition that individual returns were filed by Shri Sai Reddy and Shri Sanjeeva Reddy, inter alia, for the assessment year 1975-76. The HUF of Sai Reddy filed wealth-tax appeals for the assessment year 1967-68 to 1975-76 in WT Appeal Nos. 248 to 251 (Hyd.) of 1978-79 and 148 to 152 (Hyd.) of 1977-78. By its orders dated 17-7-1979 the Tribunal held in wealth-tax proceedings that in the assessment year 1975-76 also there was no partition. They found that if at all there was partition it was only in the succeeding assessment year.
6. In the meanwhile, the WTO completed the individual assessments against Shri Sai Reddy for the assessment years 1971-72 to 1975-76 and against Shri Sanjeeva Reddy for the assessment year 1975-76. He made an assessment against Shri Sai Reddy for the assessment year 1975-76 by his assessment order dated 30-7-1976 under section 16(3) of the Act on a total wealth of Rs. 12,24,520 raising a demand of Rs. 28,980. Against Shri Sanjeeva Reddy assessment was completed for 1975-76 on a total wealth of Rs. 13,64,800 as per the assessment order dated 30-7-1976 under section 16(3). Against the individual assessment, Shri Sai Reddy and Shri Sanjeeva Reddy, went in appeal before the AAC who gave partial relief. Thereupon the revenue filed appeals in the individual assessments of the Shri Sai Reddy for the assessment years 1971-72 to 1975-76 year 1975-76 before this Tribunal. These appeals were taken up by this Tribunal A Bench in WT Appeals Nos. 342 to 345 (Hyd.) of 1979.
All of them were disposed of by a common order dated 25-9-1980 during the course of which the Tribunal had ordered as follows : "There will be no claim which will fall to be assessed in the hands of Shri Sai Reddy for assessment year 1971-72 to 1975-76 and in the hands of Shri Sanjeeva Reddy for assessment year 1975-76." "Protective assessments made in the case of each of the assessee as referred to above they have to be cancelled." Implementing the said orders the WTO passed modificatory orders dated 18-12-1982 vacating the assessments, inter alia, for the assessment year 1975-76 against Shri Said Reddy as well as Shri Sanjeeva Reddy.
Before passing of the modificatory orders in the case of each of these assessees they filed separate petitions dated 20-10-1982 before the WTO requesting for grant of refunds of the amounts which they have paid on 30-12-1975 and 31-12-1975. Shri Said Reddy requested for the refund of Rs. 54,360 paid on 30-12-1975 through SBH, challan No. 8094 whereas Shri Sanjeeva Reddy prayed for refund of Rs. 29,600 paid on 31-12-1975 in SBH Gunfoundry by cheque No. 543804. They made a request for refund of those amounts paid under the VD Act in their individual statutes with interest at 12 per cent as there is no assessment against them individually as held by the Tribunal. However, the WTO, by his modifictory orders dated 18-12-1982 held, as there was no specific provision for refund of the amount paid under the VD Act towards wealth-tax no question of refunds arises. He had also relied upon this Tribunals decision in the case of Smt. Rambai v. WTO [WT Appeal Nos.
469 to 475 (Hyd.) of 1980 dated 29-7-1981] wherein it was held that the return filed along with declarations under the VD Act, cannot form a basis for the assessment. The WTO held that unless the assessment is made the tax paid under the VD Act cannot be adjusted under the terms of section 15(7). Therefore, he held that the respective amounts deposited under the VD Act cannot be refunded. As against each of the modificatory order Shri Sai Reddy and Shri Sanjeeva Reddy went in appeal before the AAC.7. The contention of the assessee was that while passing the order under section 16(3) on 30-7-1976 the WTO recognised the return of wealth, field by each of the assessee, along with the declaration in Form No. C provided under the VD Act, is a return of wealth and they were recognised as those filed under the Act, apply to the assessees case. According to them, refusal to grant refund amounts to non-implementation of the order of the Tribunal. The AAC held that in the assessment order dated 30-7-1976 the WTO stated that the assessee filed return of wealth in his individual status showing a net wealth of Rs. 16,58,776 for the assessment year 1975-76 and it is very clear that the assessee filed return of wealth before the WTO on the basis of which the assessment, though termed protective was completed. Hence, the contention of the assessee that while passing the order on 30-7-1976 under section 16(3) the WTO recognised the turn of wealth of the assessee as one field under the Act has to be accepted. He also held that the decision in the case of Smt. Rambai (supra) replied upon by the WTO cannot apply to the facts of the assessees case. The AAC also held that according to section 15(7) where any wealth-tax was paid by the declarant for any assessment year credit therefore shall be given to the declarant in the assessment made under the Act for that year. The AAC also held that the WTO had taken a too technical a view of section 15(7). He pointed out that substative decision of this Tribunal was that the net wealth of the assessees in their individual capacity should be considered at nil and since the assessees filed returns of wealth which were accepted by the WTO on the basis of which assessments were made, though termed as protective assessments, the assessee are entitled to the credit for the tax paid under the VD Act in view of the clear provisions of section 15(7) of the VD Act. The AAC also held that while giving effect to the Tribunals order the WTO was required to delete the wealth-tax assessed by him in the assessees individual assessments and consequent upon the nil wealth to be assessed in their hand, on the basis of the returns filed by them, the assessees are entitled to the refund of wealth-tax paid by them under the VD Act. Ultimately, the WTO was directed to refund Rs. 54,360 to Shri Sai Reddy and Rs. 29,600 to Shri Sanjeeva Reddy though orders dated 14-3-1983 the appeals filed by these assessees are allowed and refunds were ordered.
8. As against the impugned orders of the AAC dated 14-3-1983 granting refunds these second appeals were filed. The cross-objections were filed by the two assessees only in support of the AACs orders and no specific prayer was made in them or no substantial relief was prayed for in them.
9. The two miscellaneous petitions were filed, as already stated above, by the assessees. In each of them it is stated that the Tribunal while passing its orders dated 25-9-1980 in WT Appeals Nos. 312 and 343 to 347 (Hyd.) of 1979 did not specifically order refunds of the amounts paid by theses for the assessment year 1975-76 and on that ground the WTO refused to grant the refunds due which is quite untenable.
Therefor, it was prayed that the Tribunal may be pleased to clarify the order dated 25-9-1980 by giving directions to the WTO to grant refund due to the assessees and pass such other orders which are deemed fit and proper in the circumstances of the case.
10. We have heard Shri V. P. Rao, the learned departmental representative and Shri M. V. Pastry, the learned counsel for the assessees. In the grounds of appeal filed on behalf of the department it is contended that as there was no specific provision under the VD Act providing for refund of wealth-tax collected under the scheme, the action of the WTO should have been upheld by the AAC. It is also contended that following the order of this Tribunal dated 29-7-1981 in Smt. Ram Bai [IT Appeal Nos. 469 to 475 (Hyd.) of 1980] the order of the WTO should have been upheld by the AAC. The assessees counsel contended that the provision of the VD Act are clear. Under section 15(4) of the VD Act, copy of the declaration made by the declarant under sub-section (1) of section 15 shall be forwarded by the Commissioner to WTO and the information contained therein may be taken into account for the purposes of the proceedings relating to the assessment or reassessment of the net wealth of the declarant under the provisions of the Act. This provision, according to the assessees counsel would clearly show that the declaration submitted under sub-section (1) of section 15 can be taken into account for the purposes of assessment or reassessment of the wealth-tax proceedings.
Rule 5 of the VD Rules, 1975, directs that the declaration under sub-section (1) of section 15 should be made duplicate in Form No. C.Sub-rule (2) of rule 5 would make it clear that a declaration under sub-rule (1) for any assessment year or years shall be accompanied by a return of net wealth for such year or years in the form prescribed under section 14. Therefore, according to the learned counsel for the assessee once returns of net wealth were filed along with the declaration filed under section 15(1), assessments or reassessments can be made making use of the contents of the statement filed by the assessees under section 15(1) are filed in Form No. C and they were also accompanied by wealth-tax returns filed under section 14(1) or (2). The Commissioner forwarded the returns as well as the statements to the WTO and directed him to complete the assessments for 1975-76.
Thereupon, the WTO recognised those very returns of wealth as these were filed under the Act and completed assessments under section 16(3) dated 30-7-1976. Once the WTO himself recognised the returns as validity filed under the Act and once the Tribunal itself had cancelled the assessments, the WTO according to the assessees counsel, cannot turn round and say that the assessment proceedings are not under the Act but should be deemed to be under the VD Act. Once the proceedings of these assessees which took place for the assessment year 1975-76 were taken to be proceedings under the Act, then under section 34 of the said Act refunds can be validly granted.
11. On the other hand, the learned departmental representative contents that in Smt. Rambais case (supra), A Bench of the Tribunal by its order dated 29-7-1981 categorically held that he return filed in compliance with the express requirements of the VD Act cannot be considered to be a return voluntarily filed under section 15, read with section 14.
Simply because a return was annexed to the declaration under the VD Act there had been no element of volition on the part of the assessee and, therefore, on that ground the returns accompanying the declarations cannot be taken to have been filed under section 14. So, ultimately, the Tribunal, held that the return accompanying the declaration under section 15 cannot be taken to be voluntary return or a return under section 14(1) or (2) and assessments under Act cannot be completed on the basis of such returns and the assessment made, if any, on such returns, would be invalid. To the same effect is the decision of the Calcutta Bench of the Tribunal in Smt. Manmohini Coomer v. WTO  8 ITD 537 (TM.). In that case it is held that the return accompanying the declaration under the VD Act as an annexure cannot form the basis of assessment and it does not give the WTO jurisdiction to make the assessment taking it as the basis under section 17 of the Act.
12. Thus, we have considered the arguments advanced at length. Firstly, we are of the opinion that as this is a case of only refund we need not go into the question whether a return accompanying Form No. C filed as per the requirements of section 15(1) is a valid return filed under section 14(1) or (2) and whether it is a voluntary return or not. The question in this case is very simple. Even according to the WTO, on the basis of the returns accompanying the declaration under section 15(1), they having been forwarded to the WTO completed the assessment against each of the assessees under section 16(3) by his orders dated 30-7-1976. Having done so, the very same WTO, in our opinion, cannot turn round and say that the proceedings which took place were not proceedings under the Act but were all proceedings under the VD Act and on that ground he cannot deny the refund of the amount. He, in our opinion is estopped to do so. We, therefore, proceed on the premise that the return filed, the assessment made, the appeal taken were all proceedings under the Act only. Once they are all proceedings which took place under the Act only. Once they are all proceedings which took place under the Act and as the assessments themselves were annulled the refund of tax already paid can be validly made under section 34 of the Act. Further, the individual assessments made against these assessees for 1975-76 were only protective assessments, which term by itself shows that only a demand can be raised by no realisation of demand can be made. A protective assessment will ordinarily be resorted in a case where the department does not know whether A or B is liable for assessment of the same asset. Now in this case admittedly the HUF headed by Shri Sai Reddy was already assessed for the assessment year 1975-76 and the demanded tax was already paid. In fact, the so-called individual assets of these assessees comprised nothing but the alleged divided properties of the HUF. So, when the HUF was itself assessed for the assessment year 1975-76, the same assets which were sought to be assessed in the individual hands of these assessees were deemed to have been already assessed. If that is so, the department cannot recover wealth-tax both from the HUF as well as opinion, once the Tribunal annulled the individual assessments for 1975-76 it means that the assessees had no assets at all to be taxed in their hands. The tax amount paid by them would remain as mere deposits which are not liable to be appropriate towards any tax. In our opinion, the deposits, thus, standing to the credits of the assessees are neither governed by the provisions of the VD Act nor by the provisions of the Act and, therefore, under the principles of general law as they cannot be appropriated towards any particular demand, the amounts can be validly refunded. Assuming without admitting that the deposits of the above amounts were governed by the provisions of the VD Act even then the position would not materially change as disclosed below. Section 15(7) is as follows : "Where any wealth-tax is paid by the declarant for any assessment year in accordance with the provisions of section 5, read with sub-section (5) or, as the case may be, in accordance with the provisions of sub-section (5A) credit therefor shall be given to the declarant in the assessment made under the Wealth-tax Act in that year." In pursuance of the provisions of the above Act as soon as the assessment was completed on 30-7-1976 under section 16(3) on a total wealth of Rs. 12,24,520 in the case of the Shri Sai Reddy the demand raised of Rs. 28,980 should be adjusted from out of Rs. 54,360 deposited by Shri Sai Reddy as per the terms of section 15(7). So also, as soon as the assessment dated 30-7-1976 was completed in the case of individual assessment of Shri Sanjeeva Reddy on a net wealth of Rs. 13,64,800 the amount of Rs. 29,600 deposited by him should have been adjusted towards the demand of Rs. 35,200. As the assessment dated 30-7=1976 were protective assessments and no realisations can be made under the demands raised the adjustment contemplated under section 15(7) did not of course take place. But suppose in a case of regular assessment once these amounts were, thus, adjusted as per the provisions of section 15(7) they can no longer remain as amounts or deposits governed by the VD Act. But they would become amounts governed by the provisions of the Act. Even according to this reasoning also the amounts were found to be refundable under section 34. Under the circumstances, the major controversial issue raked up by the parties in these appeals which is adverted to above and which is already concluded by at least two orders of the Tribunal need not be touched for the disposal of these matters. Suffice it for us to say that ultimately we found that the refund of the amounts to the assessee by the impugned order of the AAC is found equitable, just besides being quite legal.
Under the circumstances, we find no merits in these appeals filed by the department and they are dismissed.
13. As already stated the cross-objections are filed only in support of the AACs order the cross-objections are also dismissed. To the extent stated by us above the two miscellaneous petitions filed by the assessees are allowed.
14. I would like to concur with the conclusion of my learned brother on a very simple ground. The orders is dispute before us are the consequential orders (dated 18-12-1982) of the WTO giving effect to the Tribunals orders dated 2-5-1980 cancelling the protective individual assessments on these two assessees inasmuch as the inclusion of the self-same assets in hand of the respective families had become final.
The assessments had been cancelled only on merits as there were no assets which were includible in the assessees hands. Hence, the consequential orders thereto have merely to cancel the demand and refund the tax, if any, adjusted against the same. Instead, the WTO tried to find another reason for refusing the refund of the tax adjusted against the original demand. It was stated that the original assessments were bad and that the tax adjusted could not be refunded as these were collected under the Voluntary Disclosure Scheme. But he stage for taking such an argument was long since past. Inasmuch as the Tribunals orders were not taken up in further reference, the only course open to the WTO is to give effect to the Tribunals order by cancelling the demand and refunding the tax adjusted against such demand in the original assessments. Besides, the original assessments themselves were styled as protective and, hence, the tax adjusted against such original assessment was bound to be refunded inasmuch as the main assessments had become final and tax thereunder had been paid if the tax had not been paid in the main (family) assessments, it would have been open to the WTO to adjust the refunds herein against the demands in such family assessments. The issue to whether the original protective assessments were otherwise invalid or as to whether the tax paid under the Voluntary Disclosure Scheme was rightly given credit cannot now arise while giving effect to the Tribunals orders. It is not open to the WTO to find new reasons for not giving effect the Tribunals orders. The assessees are entitled to succeed on this ground alone. I agree that the departmental appeals have to be dismissed on this ground alone.
15. The assessee had filed cross-objections as well as miscellaneous petitions on the original order seeking clarifications for directions of refund. Cross-objections try to meet departmental objections on merits. Since assessees are entitled to succeed merely on the ground that the WTO has only limited jurisdiction while giving effect to the Tribunals orders, the cross-objections have become infructuous and they are dismissed. As for the direction for issue of refund requested in the miscellaneous petitions, such a direction is now unnecessary in view of our order of dismissal of departmental appeals seeking restoration of WTOs orders. If it were necessary to deal with the same, we could have had to authorise the consequential relief by way of refund of tax adjusted against the original demand which stood cancelled by the Tribunal. It is for this reason that the miscellaneous petitions have to be treated as allowed inasmuch as the reliefs claimed have been allowed by dismissal of departmental appeals.
16. The entire exercise by way of departmental appeals appear to be academic even for another reason. We are informed that the refunds have already been issued in pursuance of the orders of first appellate authority. If it were not possible for the WTO to issue refund of wealth-tax paid under the VD Act, how was he able to adjust it at first instance Apparently, section 15(7) is his authority. If he could adjust it at first instance, he can certainly refund it if such adjusted tax is found not payable. If he did not wish to refund any tax, all he had to do was to refrain from making any assessment. Having chosen to make an assessment and having adjusted the tax against a demand, there is no means of appropriating the tax so adjusted in case the demand is reduced or cancelled in further appeal. Having issued the refund, it is possible for the revenue to get it back when the demand, against which it was originally adjusted, no longer survives Can there be a collection back of an amount against a non-existent demand These appear to be further hurdles in the way of departmental appeals.