(-1-) MGN IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WEALTH TAX REFERENCE NO.28 OF 1998 The Commissioner of Wealth Tax..Applicant Vs. Shri A.M. Bhiwandiwalla.......Respondent WITH WEALTH TAX REFERENCE NO.42 OF 1998 The Commissioner of Wealth Tax..Applicant Vs. Shri A.M. Bhiwandiwalla.......Respondent Mr. P.S. Sahadevan, for the Applicants. CORAM: F.I. CORAM: F.I. CORAM: F.I. REBELLO REBELLO REBELLO & R.S.MOHITE, JJ. R.S.MOHITE, JJ. R.S.MOHITE, JJ. DATED: 13th February, 2009 DATED: 13th February, 2009 DATED: 13th February, 2009 ORAL JUDGMENT: (PER F.I. REBELLO): ORAL JUDGMENT: (PER F.I. REBELLO): ORAL JUDGMENT: (PER F.I. REBELLO): . In both the references the questions are identical. Wealth Tax Reference No.28 of 1998 pertains to Assessment year 1976-77, 1978-79, 1981-82 and 1982-83 and Wealth Tax Reference No.42 of 1998 refers to the assessment years 1979-80 and 1980-81. 2. The Tribunal has referred the following questions at the instance of the Revenue:- 1. Whether on the facts and in the (-2-) circumstances of the case, the Tribunal was right in law in holding that the IAC Asstt. Range -VII (A) had no jurisdiction over W.T. Cases of the assessee even though the case of the assessee was validly transferred to the IAC, Asstt. Range VII (A) by the CIT, Bombay City-VII, Bombay, by a notification u/s.127 of the I.T. Act, 1961? 2. Whether on the facts and in the circumstances of the case, the Tribunal failed to appreciate that u/s.8 of the W.T. Act, the officer having jurisdiction under the I.T. Act had to perform the functions under the W.T. Act also, particularly when the transfer of income tax case u/s.127 of the I.T. Act, 1961 was held to be valid and consequently the combined operation of sec. 127 of I.T. Act and sec. 8 of the W.T. Act gave proper jurisdiction to the IAC Asstt. Range VII (A)? 3. Whether on the facts and in the circumstances of the case, the Tribunal was justified in ignoring the fact that the transfer of I.T. case was not made u/s.125A of I.T. Act and consequently there was no requirement of issuing a separate (-3-) notification u/s.8AA of the W.T. Act? 4. Whether on the facts and in the circumstances of the case, Tribunal was justified in setting aside the assessments and rejecting the departmental appeals?" Though the questions were referred, ultimately they will have to be answered in the context as to whether the Wealth Tax Officer had jurisdiction. 2. A few facts may be stated. The assessee was being assessed to wealth-tax by the WTO., C-IV Ward. Consequently, the C.I.T. transferred the cases to the IAC, Asstt. Range VII (A) by issuing order u/s.127(1) of the I.T.Act, 1961. Accordingly, the said IAC completed the assessment in respect of the assessee for the impugned years also. The contention of the assessee was that the IAC had no jurisdiction to pass the assessment order under the Wealth Tax Act as the Wealth-tax cases were not transferred to him. IAC did not agree with the contention of the assessee and completed the assessment. In appeal, the CWT (A) agreed with the contention of the assessee and set aside the orders of the IAC. 3. On further appeal, the Tribunal held that if (-4-) the CIT had transferred income-tax cases from the IAC, C-IV Ward to IAC by a notification, it did not automatically mean that the said notification covered the cases under the Wealth-tax Act as well. For wealth-tax purposes, a separate notification u/s.8AA of the Act was required. In coming to this conclusion, the Tribunal had followed its earlier order in which the Tribunal had relied on the decision of the Madras High Court in the case of CWT vs. B. Nathmal Vaid (154 ITR 186). The Tribunal also held that since the IAC had no jurisdiction, there was no point in discussing the appeals of the department and the assessee. The Tribunalto hold that the Wealth Tax Officer had no jurisdiction, was principally guided by the judgment of the Madras High Court in Commissioner of Wealth-tax vs. B. Commissioner of Wealth-tax vs. B. Commissioner of Wealth-tax vs. B. Nathmal Vaid, (1985) 20 Taxman 222 (Madras) Nathmal Vaid, (1985) 20 Taxman 222 (Madras) Nathmal Vaid, (1985) 20 Taxman 222 (Madras). 4. We shall first consider the relevant provisions of the Wealth Tax as it then stood. Gainful reference may be made to Section 8 which reads as follows:- "8. Wealth-tax Officer.-- Every Income-tax Officer having jurisdiction or exercising powers as such under the Income-tax Act in respect of any individual, Hindu undivided family or company shall perform the (-5-) functions of a Wealth-tax Officer under this Act in respect of such individual, Hindu undivided family or company: Provided that where two or more Income-tax Officers have jurisdiction or exercise powers under the Income-tax Act in respect of any individual, Hindu undivided family or company, they shall have concurrent jurisdiction and shall perform their functions in respect of such individual, Hindu undivided family or company, as the case may be, in accordance with such general or special orders in writing as the Commissioner or the inspecting Assistant Commissioner authorised by the Commissioner in this behalf may make for the purpose of facilitating the performance of such functions. Explanation.-- For the purposes of this section the Income-tax Officer or the Income-tax Officers having jurisdiction in relation to a person who is not an assessee within the meaning of the Income-tax Act, shall be the Income-tax Officer or Income-tax Officers in respect of the area in which that person resides." (-6-) . A perusal, therefore, of this Section would clearly indicate that the Income-tax Officer exercising jurisdiction or power under the Income-tax Act will be the W.T.O., for the purpose of the Wealth-tax Act would be the Wealth Tax Officer. 5. Section 127 of the Income-tax Act confers powers on the Authorities specified therein to transfer cases from one Assessing Officer to another Assessing Officer. We may gainfully reproduce Section 127(1) which reads as under:- "127(1) The Director General or Chief Commissioner or Commissioner may after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him." Thus by operation of law once Notification is issued (-7-) under Section 127(1) then the Officer in respect of whom power has been conferred will be the Assessing Officer who can exercise the jurisdiction. If this is read in the context of Section 8 of the Wealth-tax which we have earlier referred to then it would be clear that the jurisdiction is co-extensive. In other words the Income-tax Officer now notified would exercise the jurisdiction in the matter of Wealth-tax also as Wealth Tax Officer, though ordinarily the Income Tax Officer of another area would not have jurisdiction. However, once notification is issued under Section 127 for the purpose of Section 8 of the Wealth Tax Act such Officer would be the Wealth Tax Officer. 6. Our attention was invited to the judgment of the Madras High Court in B. Nathmal Vaid (supra) where a learned Bench of the Madras High Court, has taken the view that unless separate notification is issued under Section 8AA then even inspite of the Notification under Section 127 the Wealth Tax Officer would not be vested with the jurisdiction in the absence of such Notification. In our opinion it would not be possible to agree with the view taken by the learned Bench of the Madras High Court. Section 8AA is specific purpose and independent of Section 127 of the Income Tax Act. On notification being issued under Section 127 the Officer in whom (-8-) jurisdiction is conferred would act both as Assessing Officer under the Income Tax Act as also Wealth Tax Act. In the absence of Notification under Section 127 it is still open to the authorities exercising powers under Section 8AA of the Wealth Tax, to independently issue a notification. That does not mean that even after Notification under Section 127 of the Income Tax Act is issued a separate Notification is required under Section 8AA. Section 8AA is a specific power which can be examined in the absence of a notification under Section 127 of the Income Tax Act. 7. Therefore, in the instant case once a Notification is issued under Section 127 the Officer for the Wealth Tax Act would be the same officer who would exercise the jurisdiction under the Income Tax Act. In our opinion, therfore, the Tribunal clearly committed an error of jurisdiction in holding that a separate Notification under Section 8AA was required. 8. In the light of the above, Reference may be answered as under:- (A) In so far as Question 1 is concerned, the Question is answered in the negative against the assessee and in favour of the Revenue. (-9-) (B) Question 2 is answered in the negative in favour of the Revenue and against the Assessee. (C) Question No.3, in view of the answer to Question Nos. 1 and 2 this question really need not be answered. (D) In so far as Question 4 is concerned, once we hold that the Wealth Tax Officer has jurisdiction, the question has to be answered in the negative in favour of the Revenue. 2.. Having held that the Wealth Tax Officer had jurisdiction the order is set aside and the matter is remanded back to the Tribunal for deciding the questions on merits. (R.S.MOHITE, J.) (F.I.REBELLO,J.) (R.S.MOHITE, J.) (F.I.REBELLO,J.) (R.S.MOHITE, J.) (F.I.REBELLO,J.)