Mal Lodha, J.
1. The Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (for short the 'Tribunal'), has referred the following question for the decision to this court:
'(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the sum of Rs. 82,264 was not includible in the wealth of the assessee in the wealth-tax assessment for the assessment years 1968-69 to 1971-72?'
2. The assessee, Shri Rangnath Bangur of Deedwana, during the pendency of the reference died on April 11, 1983, His legal representatives, Shri Shreekumar Bangur and Smt. Kamla Devi Bangur, were brought on record, vide order dated April 17, 1984.
3. We are concerned in this reference with the assessment years 1968-69, 1969-70, 1970-71 and 1971-72. The valuation dates are March 31, 1968, March 31, 1969, March 31, 1970, and March 31, 1971. The assessment to income-tax of the assessee in respect of the assessment year 1967-68 was completed on February 10, 1972. As a result of the assessment, the assessee became entitled to a refund of Rs. 82,264. The refund had arisen as the assessee had deposited excess advance tax in response to the demand notice issued to him by the ITO under Section 210 of the I.T. Act, 1961 (Act No. 43 of 1961) (for short the 'I.T. Act'). The final tax determined was much less and, therefore, the assessee became entitled to (refund of) Rs. 82,264. The ITO while computing the wealth of the assessee in respect of the aforesaid four assessment years included the aforesaid amount of Rs. 82,264 in the net wealth of the assessee. An appeal was filed by the assessee against the orders of the WTO. The AAC by his order dated April 26, 1973, confirmed the order of the WTO, in so far as it related to the inclusion of Rs. 82,264 in the wealth of the assessee. Further appeals were filed before the Tribunal. The Tribunal by a common order dated December 20, 1974, allowed the appeals and deleted the amount of Rs. 82,264 from the assessments. Reference application under Section 27(1) of the W.T. Act, 1957 (No. 27 of 1957) (for short 'the Act' herein), was filed and the Tribunal has referred the aforesaid question for our decision.
4. We have heard Mr. J. P. Joshi, learned counsel for the Revenue, as well as Mr. Rajesh Balia, learned counsel for the legal representatives of the assessee, Sri Rangnath Bangur.
5. The assessee had deposited the amount of advance tax in pursuance of the demand notice under Section 210 of the I.T. Act issued by the ITO. Rs. 82,264 was deposited in excess as is apparent from the final assessment order of the ITO by which the tax determined was much less than the amount that was paid as advance tax. The final assessment order gave rise to the refund of Rs. 82,264. It is clear that the entire amount of advance tax was deposited by the assessee with the income-tax department in response to a statutory demand notice. Until the assessment was finalised and excess amount of tax so paid became payable to the assessee, the assessee had no right or interest or lien of any kind whatsoever thereon. The right for refund had accrued in favour of the assessee after the finalisation of the assessment order relating to the assessment year 1967-68 on February 10, 1972.
6. Valuation date has been defined in the Act as under:
'(q) 'valuation date', in relation to any year for which an assessment is to be made under this Act, means the last day of the previous year as defined in Section 3 of the Income-tax Act, if an assessment were to be made under that Act for that year :...
(ii) in the case of a person who is not an assessee within the meaning of the Income-tax Act, the valuation date for the purposes of this Act shall be the 31st day of March immediately preceding the assessment year ; '
7. Section 14 of the Act deals with the return of wealth. Sub-section (1) of Section 14 is as follows:
'14. (1) Every person, if his net wealth or the net wealth of any other person in respect of which he is assessable under this Act on the valuation date was of such an amount as to render him liable to wealth-tax under this Act, shall, before the 30th day of June of the corresponding assessment year, furnish to the Wealth-tax Officer a return in the prescribed form and verified in the prescribed manner setting forth the net wealth as on that valuation date :
Provided that in the case of a person whose net wealth or the net wealth of any other person in respect of which he is assessable under this Act includes the value of any assets held in a business or profession and the time (whether fixed originally or on extension) for furnishing the return of his total income or, as the case may be, of the total income of the other person aforesaid for the said assessment year under Sub-section (1) or Sub-section (2) or Sub-section (3) of Section 139 of the Income-tax Act, expires on or after the 30th day of June aforesaid, the return in respect of such net wealth for the assessment year may be furnished before the expiry of the time for furnishing such return of income. '
8. According to Section 16(1) of the Act, if the WTO is satisfied without requiring the presence of the assessee or production by him of any evidence that . a return made under Section 14 or Section 15 is correct and complete, he shall assess the net wealth of the assessee and determine the amount of wealth-tax payable by him or the amount refundable to him on the basis of such return.
9. The Gujarat High Court in CWT v. Raipur . : 52ITR482(Guj) held that in order to constitute a 'debt' within the meaning of the expression in Section 2(m) of the W.T. Act, it is not a pre-requisite that there must be an ascertained sum of money legally recoverable in praesenti and that it is sufficient if there is a present obligation to, pay a sum of money whether the amount thereof is ascertained or not and whether the amount is presently payable or payable at a future date and that it must not be a contingent obligation. The assessee in that case claimed to deduct a sum of Rs. 11,40,755 in computing his net wealth which consisted of (i) provision for taxation, and (ii) the last instalment of advance tax due on the valuation date. In Raipur Mfg. Co.'s case : 52ITR482(Guj) it was observed as under (p. 522):
' A condition subsequent, the fulfilment of which may result in the reduction or even extinction of liability, would not have the effect of converting the liability which attaches under such notice under Section 18A into a contingent liability. '
10. These observations were approved by their Lordships of the Supreme Court in CWT v. Standard Vacuum Oil Co. Ltd. : 59ITR569(SC) . In that case, the assessee (respondent) claimed that in computing its net wealth for purposes of wealth-tax that amount ought to be deducted as a debt owed by it within the meaning of Section 2(m) of the Act on the valuation date. The question arose whether the amounts directed to be paid by a notice of demand are ' debts ' owed by the assessee within Section 2(m) of the Act, on the respective valuation dates. In that case, notices were issued under Section 18A(1) of the Indian I.T. Act, 1922, which has now been replaced amongst others by Section 210 of the Act. It was observed as under (p. 572):
' It is not necessary to refer to the rate at which he has to calculate the tax. Sub-section (2) of Section 18A enables an assessee to formulate his own estimate of the tax payable by him if he considers that the income is less than that on which he has been required to pay tax, but he has to send this revised estimate of the tax payable by him before any one of the dates specified in Sub-section (1)(a) and adjust the excess or deficiency in respect of any instalment already paid in a subsequent instalment or in subsequent instalments. It is this provision which Mr. Sastri relies on strongly to show that the demand under Section 18A(1) is not a debt owed, within Section 2(m) of the Wealth-tax Act. He further refers to Sub-section (5) which provides for payment of simple interest by the Central Government for any amount paid by the assessee in accordance with the provisions of Section 18A. He says that this shows that it is really the Government which ultimately becomes the debtor and there is no question of any debt being owed by the assessee. He further urges that the word 'debt' connotes a definite fixed amount and does not include merely a liability to pay a sum which is not ascertained.
In our opinion, the High Court was right in answering the question in favour of the assessee. Section 18A(10) provides that if the assessee does not submit a revised estimate under Sub-section (2) of Section 18A, and he does not pay on the specified date any instalment of tax that he is required to pay under Sub-section (1), he shall be deemed to be an assessee in default in respect of such instalment or instalments, and if he does submit a revised estimate but does not pay an instalment in accordance therewith on the date or dates specified in Sub-section (1), he shall be deemed to be an assessee in default in respect of such instalment or instalments. Under Sub-section (11), any sum paid or recovered from the assessee in pursuance of the provisions of Section 18A is given credit towards the tax due in respect of the appropriate year. We cannot find any substantial difference between advance tax paid under the provisions of Section 18A and tax due and paid under a demand notice passed after an assessment. The only difference is that if the facts so warrant, the assessee is enabled to pay less than the amount demanded by the Income-tax Officer. But till a new estimate is made by the assessee, the amount is ascertained and there is a statutory liability on the assessee to pay the amount mentioned in the order under Section 18A.'
11. Standard Vacuum Oil Co.'s case : 59ITR569(SC) was followed in Assam Oil Co. Ltd. v. CWT : 60ITR267(SC) . It was held therein that in computing the net wealth of the appellant company on December 31, 1956, which was the relevant valuation date, the final instalment of tax demanded under Section 18A of the Indian I.T. Act, 1922, and payable on or before March 15, 1957, was deductible as it was a debt owed by the appellant company on the valuation date within the meaning of Section 2(m) of the W.T. Act, 1957. It was also held as per majority that the amount set apart by the appellant-company in its balance-sheet as on December 31, 1956, as an estimated provision for meeting its tax liability, less the last instalment of the demand of advance tax under Section 18A(1) of the I.T. Act outstanding, was a debt owed by the appellant-company on December 31, 1956, the relevant valuation date within the meaning of Section 2(m) of the W.T. Act, 1957, and was deductible in computing its net wealth as on that date.
12. Mr. J. P. Joshi learned counsel for the Revenue invited our attention to CWT v. Kantilal Manilal : 88ITR125(Guj) and CWT v. Kantilal Manilal : 90ITR289(Guj) . He laid emphasis on the words used in Manilal's case : 88ITR125(Guj) 'the liability which exists in praesenti on the relevant valuation date is the liability to pay tax on the total income as determined in accordance with the provisions of the I.T. Act or tax on net wealth as determined in accordance with the provisions of the W.T. Act or tax on gift as determined in accordance with the provisions of the G.T. Act'. It was stated therein that the liability is not ascertained on the relevant valuation date and has to be quantified. As regards quantification of the liability, it was said that the deductions permissible in computing the net wealth of the assessee are in respect of the tax as finally determined on assessment under the respective enactments and not the tax as computed in accordance with the returns filed by the assessee. In that case, Assam Oil Co. Ltd.'s case : 60ITR267(SC) has been referred to. A perusal of the decision in Kantilal Manilal's case : 88ITR125(Guj) shows that there was provision for payment of tax in the balance-sheet and, in that connection, the question arose whether the provision for payment of the tax made therein entitles the assessee to the deduction of the amount on the valuation date. Kantilal Manilal's case : 88ITR125(Guj) has been referred to by the judges of the Gujarat High Court in Kantilal Manilal's case : 90ITR289(Guj) . One of the questions involved in that case was whether the deduction admissible is in respect of the tax payable pursuant to the relevant return filed by the assessee or whether such deduction is admissible in respect of the tax as finally determined on the assessment and in regard to that the learned judges held that this was concluded by the decision rendered in Kantilal Manilal's case : 88ITR125(Guj) and that the tax liability admitted as a deduction in computing the net wealth of the assessee must be taken to be the amount of tax as finally determined on the assessment and not the amount of tax computed on the basis of the return filed by the assessee. Having considered both the aforesaid decisions cited by Mr. J. P. Joshi, learned counsel for the Revenue, we are disposed to think that they cannot be of any assistance in answering the question with which we are concerned in this reference and they are distinguishable.
13. Clause (a) of Sub-section (1) of Section 143 of the I.T. Act, inter alia, lays down that the ITO shall determine the sum payable by the assessee or refundable to him on the basis of such assessment. According to the aforesaid provision, it is abundantly clear that the ITO while passing the assessment order has to determine the amount payable by the assessee as income-tax and, if necessary, order the refund of the amount that has already been deposited by him under Section 210 of the I.T. Act on the basis of such assessment. By making a reference to the aforesaid provision, we want to emphasise that the refund of the excess amount of the tax which has been deposited under Section 210 of the I.T. Act is made at the time of passing the order of assessment. The assessee had deposited the amount of advance tax in compliance with the statutory demand notice issued to him under Section 210 of, the I.T. Act. After the deposit of the amount until the order for refund of the excess amount was made, he had no claim, right, title or interest to that amount. For all purposes, until the order of refund was made, he had parted with that amount and it ceased to be his. Under Section 14 of the Act, the assessee was only required to file the return of his net wealth for which he was liable to pay wealth-tax, keeping in view the valuation date and under Section 16, the WTO is required to determine the amount of wealth-tax payable by him. After the payment of the amount of advance tax in compliance with the notice under Section 210 of the I.T. Act, the amount could not be said to be the wealth of the assessee on the valuation date and that amount could not be included in the net wealth of the assessee. The principles laid down in the aforesaid two decisions of the Supreme Court afford useful guidance for answering the question referred to this court.
14. It may be recalled here that the valuation dates for the assessment years 1968-69 to 1971-72 are March 31, 1968, March 31, 1969, March 31, 1970, and March 31, 1971. The assessment of income-tax of the assessee in respect of the assessment year 1967-68 was completed on February 10, 1972, under Section 143(1)(a) of the I.T. Act and it was thereafter that the amount of Rs. 82,264 could be included in the net wealth of the assessee. The Tribunal was, therefore, right in holding that the assessee had no claim or title to the amount of Rs. 82,264 for refund prior to February 10, 1972, the date when the assessment of income-tax regarding the assessment year 1967-68 was made by the ITO concerned and for that matter it could not appear as part of the net wealth of the assessee on the valuation date concerned in respect of the assessment years 1967-68 to 1971-72. In our opinion, the Tribunal was justified in holding that the sum of Rs. 82,264 was not includible in the wealth of the assessee for the assessment years 1968-69 to 1971-72.
15. The question referred to this court for decision is answered in the affirmative, i.e., in favour of the assessee and against the Revenue.
16. There will be no order as to costs.
17. The office shall take action in accordance with Section 27(6) of the Act.