Delhi H.C : Whether on the facts and in the circumstances of the case, the provisions of s. 35 of the WT Act can be invoked to rectify the original assessment and to include the value of the jewellery thus giving effect to the amendments effected in s. 5(1)(viii) of the WT Act, 1957, by the Finance (No. 2) Act of 1971 ?

Counsel Appeared

Sanjiv Khanna with Ajay Jha, for the Petitioner : None, for the Respondent

JUDGMENT

ARIJIT PASAYAT, C.J. :

These two reference applications invoke an identical question, pertaining to asst. yrs. 1968-69 and 1969-70, which has been referred under s. 27(1) of the WT, 1957 (for short the Act) by the Appellate Tribunal, Delhi Bench-E, (for short the Tribunal), for opinion of this Court : “Whether on the facts and in the circumstances of the case, the provisions of s. 35 of the WT Act can be invoked to rectify the original assessment and to include the value of the jewellery thus giving effect to the amendments effected in s. 5(1)(viii) of the WT Act, 1957, by the Finance (No. 2) Act of 1971 ?” Since answer to the question would depend upon the scope and ambit of s. 35 of the Act, a detailed reference to the factual position is unnecessary. In brief, it is an follows : Assessments were originally completed for the two assessment years. When such assessments were taken up, the assessee claimed exemption in respect of jewellery valued at Rs. 2,90,025. The AO accepted the assessee’s claim and value of jewellery was not included in the net wealth. Subsequently, by Finance (No. 2) Act, 1971, an amendment was made to s. 5(1)(viii) making jewellery liable to wealth-tax. The explanations were added to this amended s. 5(1)(viii), enlarging the scope of interpretation of the word ‘jewellery’. The Explanations were made operative w.e.f. 1st April, 1972. Referring to the amendment, the WTO was of the view that non-inclusion of value of jewellery in the original assessments was a mistake apparent from the record. Proceedings was a mistake apparent from the record. Proceedings were initiated under s. 35 of the Act and orders were passed including value of jewellery in the net wealth of the assessee. Appeals were filed before the AAC. It was contended by the assessee before him that there is no scope for bringing in application of s. 35 of the Act. The assessee’s plea was accepted by the AAC. In appeal by the Revenue, the order of the AAC was sustained by the Tribunal. It was held that the question was a debatable one as to whether the amending provisions applied to a concluded assessment against which no furtherproceedings are pending on the date of enactment of amending provisions and, therefore, s. 35 had no application to the case. On being moved for reference, the prayer was accepted by the Tribunal. Heard learned counsel for the Revenue. There is no appearance on behalf of the assessee in spite of service of notice. The point in issue has been directly dealt with and adjudicated upon by the apex Court in J.M. Bhatia, AAC vs. J.M. Shah (1985) 42 CTR (SC) 382 : (1985) 156 ITR 474 (SC) : TC 67R.1097, wherein it was held that s. 35 had application. Following the ratio of the said decision, we answer the question in the affirmative, in favour of the Revenue and against the assessee. The reference applications are disposed of.

[Citation : 246 ITR 341]