- (1.) This appeal seeks to raise the following question of law for our determination : Did the Appellate Assistant Commissioner of Wealth-tax have the power to rectify his predecessor's order dated June 26, 1970 in view of the fact that there was no error apparent on the face of the record because the question as to whether the Amending Act applied to assessments which were already completed was a debatable question The High Court certified the question to be of general public importance which required a decision of this Court but in our view on the facts of case it is unnecessary to decide that question as the appeal could be disposed of briefly on the basis that the assessment in question could not be regarded as having become final or complete and therefore the postulate being absent the question does not arise.
(2.) The facts which are said to give rise to the question raised in the appeal are these. For the assessment year 1969-70 the respondent-assessee was assessed for wealth-tax purposes on the total wealth of Rs. 6,07,690/-, which included jewellery and ornaments of the value of Rs. 4,15,942 by an assessment order made by the Wealth-tax Officer on February 11, 1970. In an appeal preferred by the assessee the AAC by his order dated June 26, 1970 excluded from her net wealth the said jewellery and ornaments of the value of Rs. 4,15,942 on the ground that they were intended for personal use of the assessee under S. 5 (1) (viii) of the Wealth-tax Act, 1957. In doing so the AAC followed the decision of this Court hi Commr. of Wealth-tax v. Arundhati Balkrishna, 77 ITR 505. No further appeal was filed against that decision of the AAC by either side and in a sense the order became final as the period provided for appeal against It was allowed to expire. Section 5(1)(viii) of the Wealth-tax Act was amended by the Finance (No. 2) Act of 1971 which received the assent of the President on August 10, 1971 but it was brought retrospectively into effect from April 1, 1963. By S. 32 of the Amending Act in S. 5(1)(viii) the words "but not including jewellery" were added at the end of that clause and these words, as stated earlier were deemed to have been inserted right from April 1, 1963. In view of this amended provision the assessee was served with a notice dated January 25, 1972 by the A.A.C. whereby he proposed to rectify her wealth-tax assessment under S. 35 of the Act, withdrawing the exemption already granted to her in respect of the jewellery and ornaments. The assessee appeared and objected to the proposed rectification but the AAC held that his predecessor has committed a mistake apparent on the face of the record in excluding the said jewellery and ornaments and he was, therefore, entitled to rectify the order passed by his predecessor and actually passed the rectification order against the assessee on February 22, 1972. The assessee challenged the said order by filing a writ petition in the High Court.
(3.) The counsel for the assessee contended before the High Court that the AAC had no power to rectify his predecessor's order dated June 26, 1970 in view of the fact that there was no error apparent on the face of the record because (a) the original assessment when made was in accordance with law; and (b) the question as to whether the Amending Act applied to assessments which were already completed was, in any event, a debatable question. At the hearing counsel for the assessee conceded that so far as the first ground was concerned the matter was concluded by a decision of this Court in M. K. Venkatachalam, Income-tax Officer v. Bombay Dyeing and Mfg. Co. Ltd 34 ITR 143: (AIR 1958 SC 875), and therefore, he did not press that ground. He, however, strenuously urged that since the original assessment had been completed long before the Amending Act was passed and since the same had become final as no appeal had been preferred against the order dated June 26,1970 by either side the Amending Act could not reach or affect such completed assessment and in any event the question whether the Amending Act covered completed assessments or not was a debatable question and, therefore, the AAC had no power to rectify his predecessor's order.;