Om Prakash, J. - (1.) PURSUANT to an order dated February 15, 1979, passed by this court, the Income-tax Appellate Tribunal drew up a statement of the case referring the following questions for our opinion : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that the Appellate Assistant Commissioner had jurisdiction to entertain an appeal against the order of the Wealth-tax Officer giving effect to the order of the Commissioner of Wealth-tax in revision under Section 25(1) of the Wealth-tax Act, 1957 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that the tax liabilities were not outstanding for more than 12 months on valuation date and were thus allowable as deduction in the computation of net wealth of the assessee ?"
(2.) BOTH the questions revolve round the same factual position and that is briefly stated thus : The assessee is an individual assessed to wealth-tax. Original assessments were completed in March, 1967, for the years 1960-61 to 1965-66. Subsequently, the Wealth-tax Officer initiated action under Section 17 of the Wealth-tax Act, 1957 (briefly, "the Act"). During the course of reassessment, the assessee claimed income-tax liability for the assessment years 1956-57 to 1965-66 which had arisen as a result of settlement made on October 18, 1966. The Wealth-tax Officer rejected the claim of the assessee and completed the reassessments on December 31, 1971. Against the order of the Wealth-tax Officer, the assessee appealed to the Appellate Assistant Commissioner who dismissed the appeal on technical grounds. Thereafter, the assessee went up in revision before the Commissioner of Wealth-tax, who passed an order as under ; "The Wealth-tax Officer is directed to modify the wealth-tax assessment by deducting the income-tax liabilities as per law." While passing an order to give effect to the order of the Commissioner of Wealth-tax, the Wealth-tax Officer observed that since the liability arose in October, 1966, when the settlement of the tax liability of the firm was made, the tax liability was relevant to the assessment year 1967-68. He was of the view that before the date of settlement neither any liability was visualised, nor it was admitted by the assessee. The liability created in 1967-68 is partly outstanding for more than 12 months. Apart from that, since the assessee had, admittedly, been withholding the payment of tax for more than 12 months from the date of the order, no deduction is permissible under Section 2(m) of the Wealth-tax Act.
(3.) ON appeal, the Appellate Assistant Commissioner directed the Wealth-tax Officer to allow income-tax liabilities of assessment years under consideration. The Revenue filed an appeal before the Tribunal against the Appellate Assistant Commissioner's order entertaining the appeal against an order giving effect to the order of the Commissioner of Wealth-tax in revision under Section 25(1) and also against the relief allowed in respect of income-tax liabilities.;