Telangana High Court
Kamal Chand Jain vs The Commissioner Of Income Tax Appeals ... on 10 January, 2024
Author: P.Sam Koshy
Bench: P.Sam Koshy, N.Tukaramji
THE HONOURABLE SRI JUSTICE P.SAM KOSHY
AND
THE HONOURABLE SRI JUSTICE N.TUKARAMJI
W.T.A.No.1 of 2006
JUDGMENT:
(per Hon'ble Sri Justice P.SAM KOSHY)
The challenge in the present appeal is to the order passed by
the ITAT in WTA.No.1/Hyd/03 for the assessment year 1992-93.
2. Heard Mr.V.N.R.Chaitanya, learned counsel for the appellant
and Mr.B.Narsimha Sarma, learned counsel for the respondent.
Perused the material available on record.
3. The instant appeal is one which has been filed under Section
27-A of the Wealth Tax Act, 1957. The primary contention of the
learned counsel for the appellant assailing the impugned order is
on the ground that the two authorities below have wrongly
interpreted the provisions of Rule 9 (a) of Schedule 3 of Wealth Tax
Act, in the course of adjudication upon the dispute. According to
the learned counsel for the appellant in terms of the provisions of
Rule 9(a) of Schedule 3 of the Wealth Tax Act, the appellant has an
option to furnish a certificate from a Chartered Accountant
showing the average value of shares which in the instance case the
appellants did avail by furnishing the certificate from Chartered
Accountant, as early as on 28.03.1996. According to the learned 2 PSK,J & NTR,J W.T.A.No.1 of 2006
counsel for the appellant, since the certificate in terms of Rule 9(a)
was already furnished on 28.03.1996, the authorities could not
have disputed the said certificate and should not have gone further
with the proceedings. The same should have been dropped
accepting the assessment initially done in terms of the returns
submitted on 10.10.1994, on the basis on which, the assessment
was concluded on the first instance.
4. However, perusal of the record would go to show that the
Deputy Commissioner of Income Tax, in the course of
reassessment proceedings has taken note of the fact that inspite of
repeated notices being issued to the assessee the appellant herein,
they have failed to produce the relevant books of accounts in
support of there admitted wealth, neither did they advance
arguments in support of returned wealth to the tune of
Rs.22,47,116/-. It is further reflected from the order of the
reassessment proceedings that the findings arrived at by the
reassessing officer was taking into consideration of the valuation of
the shares as it stood as on 31.03.1992, at the price quoted in the
nearest stock exchange. So far as the shares which the appellants
were holding, the order of the reassessing officer was further
subjected to challenge before the Commissioner of Appeals, 3 PSK,J & NTR,J W.T.A.No.1 of 2006
wherein again the appellate authority upon thorough verification of
the records and pleadings and also upon hearing the contentions
reached to the conclusion which reads as follows:
The only argument taken before me by the appellant is that the report of the Accountant certifying the average rate of shares, as per the requirement of Rule 9A, was furnished before the AO on 28.03.96 with the request to consider the average rate adopted for valuation of shares. This has taken place during some correspondence between the AO and the appellant after the audit objection was raised.
I find, it is true that the appellant has now filed a report as per the requirements of Rule 9A of Schedule III of the Wealth Tax Act, but this has been filed after the regular assessment u/s 16(3) was completed on 10.10.94. It is a settled law that a notice provided under a Statute must be complied within the time provided. In this case, the stipulated time ended with filing the return of wealth. Not only the statutorily provided time was over, but even a scrutiny assessment was over.
I find that in this case also, the maximum delay, which should have been permitted to the appellant, for late filing of the requisite report under Rule 9A of Schedule III of Wealth Tax Act, should have been at best before the completion of original scrutiny order 4 PSK,J & NTR,J W.T.A.No.1 of 2006
dated 10.10.94. What we find is that the report has been filed by a delay of 4 years i.e., on 28.03.96. Accordingly, I observe that the delayed compliance is not a sufficient compliance for a statutory provision. I rely upon the decision of the CIT vs. Nagpur Hotel Owners Association [247 ITR 201 (SC)], wherein a similar issue was involved. The case relied upon by the appellant is that of ITO vs. Mandira D. Vakharia [167 CTR 224 (kar)], a decision of High Court of Karnataka and the other case is of Hemson Industries vs. ITO [171] CTR 527 (AP)] of High Court of A.P. With due respect to the Hon'ble High Courts, I follow the guidelines as per the Supreme Court's decision. Moreover, if appellant's arguments; that statutory form filed in reopened assessment proceedings should be considered sufficient compliance; will nullify the legal provisions for reopening the proceedings by a back door, since case was legally and correctly reopened for non- compliance of statutory provisions. On this ground, the order of the AO is upheld.
5. There is yet another aspect which needs to be consider is
that the regular assessment under Section 16(b) stood concluded
on 10.10.1994. The appellant is subsequently trying to take
advantage of the provisions of part C of the Wealth Tax Act, under
Schedule III, the said provision which include Rule 9, 9A, 10, 12 5 PSK,J & NTR,J W.T.A.No.1 of 2006
and 13, stood omitted from the Wealth Tax Act, with effect from
01.04.1993. The effect of the omission of the said provision would
clearly give an indication of the said provision no longer being in
existence under the Act. In the instance case the required
certificate under 9A admittedly has been produced by the
appellants before the competent authority much after 10.10.1994,
i.e., after the assessment under Section 16(3) has been carried out
and by which time, the provisions of Rule 9A also stood omitted
from the statute.
6. So far as the judgment referred to by the counsel for the
appellant that of Income Tax Officer vs. Mandira D. Vakharia 1,
we find the said judgment also having been relied upon by the
appellate authority while deciding the same and we are also of the
considered opinion that if we look at the facts of the said case, it
would gives a clear indication that the said judgment was passed
under the factual backdrop where the assessee had himself moved
an application for rectification under Section 154 which stood
rejected unlike the present case. The said judgment would be
1 2001 ITR VAT 250, 6 PSK,J & NTR,J W.T.A.No.1 of 2006
distinguishable on this ground alone so far as the reliance made by
the appellant is concerned.
7. Under both the circumstances, we are of the considered
opinion that the finding arrived at by the two authorities below
cannot be found fault with, nor can be contentions raised by the
appellant be brought within the purview of substantial question of
law only under which an appeal under Section 27A of the Wealth
Tax Act could be entertained. The appeal thus being devoid of
merits and it deserves to be and is accordingly rejected.
Consequently, miscellaneous applications pending, if any,
shall stand closed.
____________________ P.SAM KOSHY, J
____________________ N. TUKARAMJI, J January 10 th, 2024.
AQS
