- (1.) THESE are eight connected applications relating to different assessment years under Section 27(3) of the W.T. Act, 1957. The Appellate Tribunal refused to state the case on the ground that no question of law arose and, therefore, the Department has now come up in the instant applications and in support of the same, we have heard the learned counsel for the Deparment. In opposition, we have heard the learned counsel for the respondent, Sri R.S. Dhawan. The learned counsel for the Department contended that, in the instant case, a question of law did arise and the Appellate Tribunal was in error in thinking that no question of law arose and also it erred in thinking that even if a question of law arose, the answer was self-evident and, therefore, it was not necessary to make a reference.
(2.) TO appreciate the rival contentions of the learned counsel, certain facts, in brief, may be stated. The respondent-assessee was assessed as an individual during the assessment years 1969-70 to 1976-77. His father, Sri J. P. Srivastava, who died on December 15, 1954, made a gift during his lifetime to the former and to his grandson, Sri V.K. Srivastava. These amounts were invested and the income therefrom was held by the AAC in the appeals for the assessment years 1954-55 and 1956-57 to belong to an association of persons, where the shares of the members were indeterminate and, therefore, liable to tax at the maximum-rate and for the subsequent assessment years, both according to the income-tax return and the income-tax assessment, the income from these assets was assessed in the status of an association of persons, where the shares of the members of the association of persons were not determinate. In the wealth-tax assessment of the respondent-assessee, Sri J. K. Srivastava, the WTO included half share of the said assessee in the association of persons consisting of the said assessee and his said son to whom, as stated above, gifts had been made by the late Sri J. P. Srivastava during his lifetime. The other half share in the said association of persons was presumably included in the assessment of Sri V.K. Srivastava, the son of Sri J.K. Srivastava, who was taken to be the other member of the said association of persons. Against the order of the WTO, an appeal was preferred by the assessee but the same did not succeed.
(3.) ON further appeal before the Tribunal, it was held that it was not possible to determine the value of the assessee's interest in the said association of persons in view of Rule 2 of the W.T. Rules. The assessee was, therefore, held not liable to be assessed to wealth-tax in respect of the value of his interest in the said association of persons. Apart from placing reliance upon Section 4(1)(b) and Rule 2, the Tribunal also placed reliance upon a number of circulars of the Board ami also upon the Finance Minister's Budget speech and the Memo explaining the provisions of Finance Bill, 1981. The Tribunal held that the circular of the Board was binding upon the Department and its officers and, therefore, the assessee was not liable to be charged with wealth-tax in respect of the share in the association of persons which was indeterminate. Lastly, the Tribunal emphasised that it was not the function of the court or the Tribunal to fill up any lacuna in the statutory provisions and that task appertained to the legislature and not to the court. The Tribunal rejected the reference application under Section 27(1) on the ground that the controversy which the Department was seeking to raise could not be raised in view of the very clear and explicit condition which could be spelt out from Section 4(1)(b) read with Rule 2 and the circular in question. In its view, the legal position was so clear and self-evident that there was no need to make a reference to this court. The Tribunal placed reliance on CIT v. Chander Bhan Harbhajan Lal [1966] 60 ITR 188 (SC), Mathura Prasad v. CIT [1966] 60 ITR 428 (SC), CIT v. Indian Mica Supply Co. P. Ltd. [1970] 77 ITR 20 (SC) and CGT v. Smt. Kusumben D. Mahadevia [1980] 122 ITR 38 (SC). These authorities are in support of the proposition that where a reference will be futile or where the answer to the proposed question of law is self-evident, the Tribunal will be justified in not making any reference to this court. The Tribunal again emphasised, while rejecting the reference application, that if there was a lacuna in the statutory provisions, then the same can be made good by the legislature and not through the instrumentality of judicial interpretation by the court or the Tribunal.;