1989 (8) TMI 103 - AT - Income Tax

Tribunal clarifies scope of Wealth Tax Act: Application under section 27(1) dismissed for order under section 35(1)(e).

NADIR B. GODREJ. Versus COMMISSIONER OF INCOME TAX.

NADIR B. GODREJ. Versus COMMISSIONER OF INCOME TAX. - TTJ 035, 357, Issues:1. Maintainability of the application under section 27(1) of the Wealth Tax Act, 1957 against the order passed by the Tribunal under section 35(1)(e) of the Act.Detailed Analysis:The judgment deals with the issue of the maintainability of an application under section 27(1) of the Wealth Tax Act, 1957 against an order passed by the Tribunal under section 35(1)(e) of the Act. The Tribunal pointed out to the learned counsel for the assessee that section 27(1) permits an application to refer to the High Court any question of law arising from an order under section 24 or section 26 of the Act. The question raised was whether the order in question was under section 24 or traceable to section 35, which deals with miscellaneous orders on miscellaneous applications. The counsel relied on decisions from other High Courts regarding similar provisions in the Income Tax Act, but the Tribunal distinguished those cases as they were not applicable to the Wealth Tax Act. The Tribunal emphasized that section 27 only allows references against orders under sections 24 or 26, excluding orders under section 35.Further Analysis:The Tribunal referred to the provisions of the Income Tax Act, 1922, to highlight the difference in the treatment of orders under various sections. It mentioned a case where the Punjab High Court held that an order passed under section 35 of the Income Tax Act could not be referred to the High Court under section 66. Additionally, the Delhi High Court's decision in another case reiterated that orders passed by the Tribunal on miscellaneous petitions are not subject to reference under section 27 of the Wealth Tax Act. These decisions were based on the Supreme Court's ruling in a related matter, emphasizing that certain orders are not eligible for reference under specific sections of the Act.Conclusion:In conclusion, the Tribunal held that when it refuses to rectify an earlier order, the refusal order falls under section 35 of the Wealth Tax Act or as a miscellaneous order under its inherent power. In the case at hand, the Tribunal's refusal to rectify the original order under section 24 meant that the original order stood, and an application under section 27(1) was not maintainable. The Tribunal dismissed the application, citing the clear terms of section 27 that limit references to High Court only against orders under sections 24 or 26 of the Act.