1992 (4) TMI 11 - HC - Wealth-tax

Appellate powers under Wealth-tax Act ss.23(5) and 24(5) include enhancement, allowing discretionary additional grounds in appeal

HC held that, under the Wealth-tax Act, the Appellate Assistant Commissioner's powers under s.23(5) and the Tribunal's powers under s.24(5) are ... Jurisdiction of the Tribunal to permit additional grounds - Additional Grounds - Entitlement to the balance of the income of the trust and to the corpus of the trust in terms of clause 1 of the deed of settlement - beneficiaries under a deed of settlement made by the grandfather of the applicant - Powers Of Tribunal - Wealth Tax Act - HELD THAT:- Under the Wealth-tax Act, the powers of the Appellate Assistant Commissioner under section 23(5) and the powers of the Tribunal under section 24(5) in deciding an appeal are worded in identical language. For reasons which are set out by us in our judgment in Ahmedabad Electricity Co. Ltd. v. CIT, we have held that, while deciding a tax appeal, the appellate authorities-the Appellate Assistant Commissioner as also the Appellate Tribunal-have jurisdiction to permit additional grounds to be raised before them even though these grounds may not have been raised before either the Assessing Officer or the Appellate Assistant Commissioner-so long as the points for decision arise from the proceedings which were the subject-matter of assessment before the assessing authority. The powers of the appellate authorities are the same as the powers of the assessing authority. Additional grounds can be entertained so long as they relate to the subject-matter of the proceedings which were before the Assessing Officer or before the appellate authority. The identical wording of sections 23(5) and 24(5) in this regard clearly shows that the powers of the Appellate Tribunal are identical with the powers of the Appellate Assistant Commissioner under the Wealth-tax Act, including the power of enhancement. Any controversy, therefore, which may have earlier existed relating to the powers of the Appellate Tribunal under the Income-tax Act, cannot, in any event, extend to the Appellate Tribunal under the Wealth-tax Act. The Tribunal, therefore, had jurisdiction, in the present case, to permit additional grounds to be raised even though these did not arise out of the order of the Appellate Assistant Commissioner. The Tribunal, however, had the discretion to allow or not to allow such additional grounds to be raised. We are not concerned here with this aspect of the question. There is nothing in this section or in any of the following sections which would indicate that the Appellate Assistant Commissioner is bound to permit the applicant to raise new grounds before it. As observed by the Supreme Court in the case of Jute Corporation of India Ltd. v. CIT [1990 (9) TMI 6 - SUPREME COURT], the appellate authority has the discretion to decide whether to permit such a new ground to be raised or not. Raising of such new ground not raised earlier cannot be a matter of right. Whether such ground should be permitted or not is a matter of discretion ; and this discretion has to be exercised on relevant considerations which are set out by the Supreme Court in the above case. Once again, we cannot go into this question in view of the fact that the question of proper exercise of discretion by the Appellate Assistant Commissioner is not before us for consideration. We are only concerned with the jurisdiction of the Tribunal to permit additional grounds to be raised which do not arise out of the order of the Appellate Assistant Commissioner. Issues Involved:1. Whether the Tribunal was justified in not permitting the assessee to raise additional grounds regarding the valuation of interests in the R. D. Birla Trust and Ashok Kumar Birla Trust.2. Jurisdiction and discretion of the Appellate Assistant Commissioner and the Tribunal in allowing additional grounds of appeal.Summary:Issue 1: Tribunal's Justification in Not Permitting Additional GroundsFor the assessment years 1962-63, 1963-64, and 1964-65, the applicant included the total value of assets from the R. D. Birla Trust and Ashok Kumar Birla Trust in his net wealth instead of the capitalised value of his interest on an actuarial basis. The Wealth-tax Officer accepted this valuation. The applicant did not initially raise the question of valuation mode in his appeals but sought to introduce it later before the Tribunal. The Tribunal rejected this, stating that the additional grounds did not arise from the Appellate Assistant Commissioner's order and required further evidence, which was not on record.Issue 2: Jurisdiction and Discretion of Appellate AuthoritiesThe Division Bench referred questions to the Full Bench due to conflicting authorities on whether the Tribunal could allow additional grounds not raised before the Appellate Assistant Commissioner. The Full Bench, referencing sections 23 and 24 of the Wealth-tax Act, 1957, and the Supreme Court's decision in Jute Corporation of India Ltd. v. CIT, held that appellate authorities have jurisdiction to permit additional grounds if they arise from the assessment proceedings. The Tribunal has the discretion to allow or disallow such grounds, which must be exercised based on relevant considerations.Conclusion:The Full Bench concluded that the Tribunal had jurisdiction to permit additional grounds even if they did not arise from the Appellate Assistant Commissioner's order. However, the Tribunal's discretion in this matter is not under question. The questions for the assessment year 1962-63 and the second question for the years 1963-64 and 1964-65 were answered in the negative, favoring the assessee. The Tribunal was directed to dispose of the case in conformity with this judgment. No order as to costs was made.