Referred Are v. W.t.a

THE HON’BLE THE ACTING CHIEF JUSTICE DILIP B. BHOSALEAND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM W.T.C. No.17 of 2000 and W.T.A. No.1 OF 2001 COMMON ORDER:- (per The Hon’ble the Acting Chief Justice Dilip B. Bhosale) W.T.C. No.17 of 2000 is filed by the Assessee under Section 27(3) ofthe Wealth Tax Act, 1957 (in short “the Act”) raising three questions of lawsaid to be arising from the orders of the Income Tax Appellate Tribunal,Bench ‘A’, Hyderabad (in short “the Tribunal”) in disposing of the appeal inW.T.A.No.203/Hyd/94, dated 27.01.1998. R.A.No.50/Vizag/98 was filed bythe assessee raising three questions of law, as set out below, to be referredto the opinion of the High Court. The said order in R.A.No.50/Vizag/1998was passed on 14.06.2000. The three questions which are sought to be referred are: a) Whether on the facts and in the circumstances of the case, theTribunal have inherent powers to recall the appeal heard anddisposed-off by its order dated 4.6.1996 inW.T.A.No.148/Hyd/94?Tribunal have inherent powers to recall the appeal heard anddisposed-off by its order dated 4.6.1996 inW.T.A.No.148/Hyd/94? b) Whether the facts and in the circumstances of the case, theTribunal have inherent powers to review its earlier judgment dated4.6.1996 in W.T.A.No.148/Hyd/94 and reverse its standsubsequently by reopening and clubbing it with the departmentalappeal in W.T.A.No.203/Hyd/94 of the same appellant and for thesame year?Tribunal have inherent powers to review its earlier judgment dated4.6.1996 in W.T.A.No.148/Hyd/94 and reverse its standsubsequently by reopening and clubbing it with the departmentalappeal in W.T.A.No.203/Hyd/94 of the same appellant and for thesame year? c) Whether on the facts and circumstances of the case, the Tribunalis right in holding that the hoardings are assets as per Section2(e) of Wealth Tax Act in W.T.A.No.203/Hyd/94 against thejudgment rendered in W.T.A.No.148/Hyd/94, dated 4.6.1996 ofthe same Bench wherein it was held as not ‘Asset’ for thepurpose of Wealth Tax Act applying the ratio of Supreme Court inthe case of Commissioner of Wealth Tax Vs. Smt.R.A.Muthurishan Ammal (72 ITR 801) and the Allahabad HighCourt in the case of F.S.Gandhi Vs. Commissioner of Wealth Tax(184 ITR 35)?is right in holding that the hoardings are assets as per Section2(e) of Wealth Tax Act in W.T.A.No.203/Hyd/94 against thejudgment rendered in W.T.A.No.148/Hyd/94, dated 4.6.1996 ofthe same Bench wherein it was held as not ‘Asset’ for thepurpose of Wealth Tax Act applying the ratio of Supreme Court inthe case of Commissioner of Wealth Tax Vs. Smt.R.A.Muthurishan Ammal (72 ITR 801) and the Allahabad HighCourt in the case of F.S.Gandhi Vs. Commissioner of Wealth Tax(184 ITR 35)? 2) W.T.A.No.1 of 2001 is filed questioning the order of the Tribunal dated14.06.2000 passed in M.P.No.26/Vizag/98 in W.T.A.No.203/Hyd/94. Thethree questions of law said to be arising from the orders of the Tribunal have been raised in the appeal. The questions of law are as set out above in paraNo.1. 3) Initially, the matters, W.T.C.No.17 of 2000 and W.T.A.No.1 of 2001,were listed before a Division Bench of this Court consisting of L. NarasimhaReddy, J and one of us (Challa Kodanda Ram, J). Both the learned Judgeshad allowed W.T.A. No.1 of 2001 and did not find it necessary for answeringquestions in W.T.C. No.1 of 2001. L.Narasimha Reddy, J, however, by hisseparate judgment summarised the issue to be considered by raising aquestion – “Whether the Income Tax Appellate Tribunal has the power torecall and review its own order, which assumed finality andrehear the appeal?” 4) The learned Judge allowed the appeal stating as follows: been raised in the appeal. The questions of law are as set out above in paraNo.1. 3) Initially, the matters, W.T.C.No.17 of 2000 and W.T.A.No.1 of 2001,were listed before a Division Bench of this Court consisting of L. NarasimhaReddy, J and one of us (Challa Kodanda Ram, J). Both the learned Judgeshad allowed W.T.A. No.1 of 2001 and did not find it necessary for answeringquestions in W.T.C. No.1 of 2001. L.Narasimha Reddy, J, however, by hisseparate judgment summarised the issue to be considered by raising aquestion – “Whether the Income Tax Appellate Tribunal has the power torecall and review its own order, which assumed finality andrehear the appeal?” 4) The learned Judge allowed the appeal stating as follows: “Therefore, W.T.A.No.1 of 2001 is allowed and the orderunder appeal is set aside. M.P.No.26 of 1998 shall standallowed and as a result, the common order, dated 27.01.1998in so far as it relates to W.T.A.No.148/Hyd/94 shall stand setaside. The order, dated 04.06.1996 passed inW.T.A.No.148/Hyd/94 shall hold good, and W.T.A.No.203 of1994, shall be treated as infructuous. under appeal is set aside. M.P.No.26 of 1998 shall standallowed and as a result, the common order, dated 27.01.1998in so far as it relates to W.T.A.No.148/Hyd/94 shall stand setaside. The order, dated 04.06.1996 passed inW.T.A.No.148/Hyd/94 shall hold good, and W.T.A.No.203 of1994, shall be treated as infructuous. In view of the nature of disposal given to W.T.A.No.1 of2001, there does not exist any necessity to answer thequestion referred to in W.T.C.No.17 of 2000.” 5) On the other hand Challa Kodanda Ram, J noticing the amendedprovision Section 27A of the Act and noticing the questions raised in W.T.C.and W.T.A. are identical, reframed the questions in W.T.A.No.1 of 2001 inexercise of the power under Section 27A of the Act. The reframed questionsare as follows: i)Whether in the facts and circumstances of the case theTribunal has power under Section 35 of the Act to rectify theorder dated 27.01.1998 and eschew the discussion relatingto W.T.A.No.148/Hyd/94?Tribunal has power under Section 35 of the Act to rectify theorder dated 27.01.1998 and eschew the discussion relatingto W.T.A.No.148/Hyd/94? ii)Whether in the circumstances of the case, the Tribunal was right in refusing to rectify the order dated 27.01.1998 andconfining the same to only W.T.A.No.203/Hyd/94? iii)Whether in the facts and circumstances of the case, theTribunal was bound to eschew the order dated 27.01.1998and confine the same to W.T.A.No.203/Hyd/94 byeschewing the discussion and decision relating to whetherthe boardings were assets for the purpose of the Wealth TaxAct? 6) The reframed question Nos.1 and 3 were answered in the affirmativeand question No.2 was answered in the negative. Challa Kodanda Ram, Jalso, in view of answering the questions in W.T.A.No.1 of 2001, did not find itnecessary to call for reference of the questions of law which were sought tobe referred in W.T.C.No.17 of 2000. In view of the difference of opinion, thematters were referred to the third Judge. The third Judge (RameshRanganathan, J) having analysed both the opinions of L. Narasimha Reddy,J and Challa Kodanda Ram, J finally came to the conclusion that both hadallowed the W.T.A.No.1 of 2001 and directed the papers to be placed beforethe Division Bench for passing final orders. Thus, the matters are listedbefore this Bench. 6) A perusal of the opinions of the three learned Judges reveal that fourquestions were considered by the Court in W.T.A.No.1 of 2001. Those are – i) Whether the Income Tax Appellate Tribunal has thepower to recall and review its own order, which assumedfinality and rehear the appeal? (As framed by LNR,J)power to recall and review its own order, which assumedfinality and rehear the appeal? (As framed by LNR,J) 6) A perusal of the opinions of the three learned Judges reveal that fourquestions were considered by the Court in W.T.A.No.1 of 2001. Those are – i) Whether the Income Tax Appellate Tribunal has thepower to recall and review its own order, which assumedfinality and rehear the appeal? (As framed by LNR,J)power to recall and review its own order, which assumedfinality and rehear the appeal? (As framed by LNR,J) ii)Whether in the facts and circumstances of the case theTribunal has power under Section 35 of the Act to rectify theorder dated 27.01.1998 and eschew the discussion relatingto W.T.A.No.148/Hyd/94?Tribunal has power under Section 35 of the Act to rectify theorder dated 27.01.1998 and eschew the discussion relatingto W.T.A.No.148/Hyd/94? iii)Whether in the circumstances of the case, the Tribunal wasright in refusing to rectify the order dated 27.01.1998 andconfining the same to only W.T.A.No.203/Hyd/94?right in refusing to rectify the order dated 27.01.1998 andconfining the same to only W.T.A.No.203/Hyd/94? iv)Whether in the facts and circumstances of the case, theTribunal was bound to eschew the order dated 27.01.1998and confine the same to W.T.A.No.203/Hyd/94 byeschewing the discussion and decision relating to whetherthe boardings were assets for the purpose of the WealthTax Act? (As framed by CKR,J)Tribunal was bound to eschew the order dated 27.01.1998and confine the same to W.T.A.No.203/Hyd/94 byeschewing the discussion and decision relating to whetherthe boardings were assets for the purpose of the WealthTax Act? (As framed by CKR,J) 7) Inasmuch as, Ramesh Ranganathan, J had concurred with the opinionof both the learned Judges, the questions of law, which have been raisedabove, in our opinion, are required to be answered as follows: QuestionNos.1, 2 and 4 are in the affirmative and Question No.3 is in the negative. 8) In the light of the discussion in para No.3, the questions in W.T.C.No.17of 2000 are not answered and the questions in W.T.A. No.1 of 2001 areanswered in terms of para No.7 above. There shall be no order as to costs. Miscellaneous Petitions pending, if any, shall stand closed. _________________________ DILIP B. BHOSALE, ACJ Date:18.09.2015ssv ____________________________ CHALLA KODANDA RAM, J THE HON’BLE THE ACTING CHIEF JUSTICE DILIP B. BHOSALEAND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM ssv W.T.C. No.17 of 2000 and W.T.A. No.1 OF 2001(per The Hon’ble the Acting Chief Justice Dilip B. Bhosale) Date:18.09.2015