TaxTMI 
TaxTMI 
1987 (10) TMI 19
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.... in holding that a reference to the Valuation Officer by the Wealth-tax Officer under section 16A of the Wealth-tax Act, 1957, was discretionary and not mandatory, even when the difference in wealth returned by the assessee and the wealth assessed by the Wealth-tax Officer was more than the limit prescribed under rule 3B of the Wealth-tax Rules ?" 2. In order to appreciate the import of the question, only a reference to the admitted facts is necessary, which can be stated thus : 3. The assessment relates to the year 1971-72 (with 31st March, 1972, as the valuation date) and the year 1972-73 (with 31st March, 1973, as the valuation date). The assets involved were a one-third share in a house situated at Rani Jhansi Road and another pro....
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....on 16A of the Wealth-tax Act, 1957, reads: "16A. (1) For the purpose of making an assessment (including an assessment in respect of any assessment year commencing before the date of coming into force of this section) under this Act, the Wealth-tax Officer may refer the valuation of any asset to a Valuation Officer-. (a) in a case where the value of the asset as returned is in accordance with the estimate made by a registered valuer, if the Wealth-tax Officer is of opinion that the value so returned is less than its fair market value; (b) in any other case, if the Wealth-tax Officer is of opinion (i) that the fair market value of the asset exceeds the value of the asset as returned by more than such percen....
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....ought to buttress the above contention with the view which the Board of Revenue itself had taken of the provisions which had been newly introduced by the Taxation Laws (Amendment) Act, 1972, with effect from January 1, 1973, and conveyed to all the Wealth-tax Officers in the country, through Circular No. 96, dated November 25, 1972. 11. In our opinion, counsel for the assessee is right in his submission. Their Lordships of the Supreme Court in K. P. Varghese v. ITO [1981] 131 ITR 597, had occasion to consider that aspect of the matter. Their Lordships held that the rule of construction by reference to contemporanea expositio is a well-established rule for interpreting a statute by reference to the exposition it had received from contempo....
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....sub-section (1) of section 16A. The Legislature by prescribing the contingencies, in which, by implication, it would not be necessary to make a reference, must again, by necessary implication, be taken to have intended that the reference to the Valuation Officer was a must if the given contingencies did not exist. 14. It has been canvassed on behalf of the Revenue that the use of the expression "may" would indicate that the provision regarding reference to the Valuation Officer is directory and not mandatory. 15. There is no doubt about the fact that the use of expressions "may" and "shall" to some extent serves as an indicium to the intention of the Legislature and helps in deciding whether the given requirement is directory or manda....