Case ID: 6009

Judgment:
ivil Appeal Nos. 88 to 93 to 1974. From the Judgment and Order dated 10.1. 1973 of t he Bombay High Court in Appeal Nos. 102 to 107 of 1966. Dr. V. Gauri Shankar and Ms. A. Subhashini for the Appe l lants. Nemo for the Respondents. The Judgment of the Court was delivered by 133 PATHAK	 CJ. These appeals by special leave raise t he question whether the High Court is right in holding that t he proviso to sub section (1) of section 25 of the Wealth Tax Act cann ot be invoked by the Revenue on the facts of this case. The respondent is assessed in the status of an individ u al under the Wealth Tax Act	 1957	 and these appeals rela te to the assessment years 1958 59	 1959 60	 and 1960 61 f or which the corresponding valuation dates are 31 March	 195 8	 31 March	 1959 and 31 March	 1960 respectively. The respondent is a share holder in Walchand and Compa ny Private Limited. On each of the three valuation dates s he held 140 shares in the Company. For the purpose of asses s ment under the Wealth Tax Act	 the respondent adopted t he valuation of the shares at their break up values with pa id up capital and reserves as there was no market quotation f or those shares. When making the assessment Orders for each of the three assessment years	 the Wealth Tax Officer reject ed the valuation of the shares as claimed by the responden t	 and estimated their value on the basis of capitalisation of profits at six per cent for the assessment year 1960 61 a nd on the basis of the break up value with certain modific a tions for the assessment years 1958 59 and 1959 60. T he respondent appealed to the Appellate Assistant Commission er of Wealth Tax	 and the Appellate Assistant Commission er determined the value of the shares on the basis of capital i sation of the investment income at six per cent and oth er income at twelve and half per cent. He allowed the appea ls of the respondent in part by separate orders dated 10 Nove m ber	 1961. The Commissioner of Wealth Tax preferred appea ls to the Appellate Tribunal on the question relating to valu a tion of the shares. The Appellate Tribunal passed a consolidated order on 23 July	 1963	 dismissing the appeals for the three asses s ment years. It observed that the valuation of the shares of the company on the relevant valuation dates determined by two valuers on arbitration in the case of another assess ee should be taken as the valuation in the case of the assess ee also. The value of the shares	 the Appellate Tribunal sai d	 worked out to an amount much less than the valuation dete r mined by the Appellate Assistant Commissioner	 and ther e fore	 the question of enhancing the value determined by t he Appellate Assistant Commissioner did not arise. The Appe l late Tribunal did not reduce the values determined by t he Appellate Assistant Commissioner as no appeals had be en filed by the respondent. Meanwhile	 however	 during the 134 pendency of the appeals before the Appellate Tribunal	 t he respondent preferred revision applications on 29 June	 19 62 under subsection (1) of section 25 to the Commissioner of Wealth Tax in respect of the aforesaid assessment years a nd contended that the valuation of the shares adopted by t he Appellate Assistant Commissioner was unreasonable and exce s sive and should be duly modified. The Commissioner made an order dated 12 August	 1964 rejecting the revision applic a tions on the ground that they were incompetent in view of cl. (b) of the proviso to sub section (1) of section 25 of the Ac t. Against that order the respondent filed a writ petition in the High Court of Bombay and contended that the Commission er had erred in dismissing the revision applications as inco m petent. On 10 11 October	 1966 a learned Single Judge of t he High Court allowed the writ petition holding the revisi on applications to be competent	 and accordingly directed t he Commissioner to entertain and dispose of the revision appl i cations in accordance with law. The Commissioner appealed to a Division Bench of the High Court and the appeal was di s missed on 10 January	 1973. The relevant provisions of section 25 of the Wealth Tax A ct read as follows: "Powers of Commissioner to revise orders of subordina te authorities. The Commissioner may either of his own moti on or on application made by an assessee in this behalf	 ca ll for the record of any proceeding under this Act in which an order has been passed by any authority subordinate to hi m	 and may make such inquiry	 or cause such inquiry to be mad e	 and	 subject to the provisions of this Act	 pass such ord er thereon	 not being an order prejudicial to the assessee	 as the Commissioner thinks fit; Provided that the Commissioner shall not revise a ny order under this sub section in any case (a) where an appeal against the order lies to t he Appellate Assistant Commissioner or to the Appellate Trib u nal	 the time within which such appeal can be made has n ot expired or in the case of an appeal to the Appellate Trib u nal the assessee has not waived his right of appeal; (b) where the order is the subject of an appe al before the Appellate Assistant Commissioner or the Appella te Tribunal. 135 The High Court has taken the view that cl	 (b) of the prov i so to sub section (1) of section 25 of the Act operates as a bar to a revision application by an assessee before the Commission er only where the assessee has also filed an appeal before t he Appellate Tribuanl. According to the High Court	 the b ar does not come into operation against an assessee where t he appeal before the Appellate Tribunal has been filed by t he Revenue. It seems to us that the view taken by the Hi gh Court cannot be sustained. Where an appeal is filed befo re the Appellate Tribunal against an order of the Appella te Assistant Commissioner	 the impugned order merges in t he order of the Appellate Tribunal when the appeal is dispos ed of on merits. If meanwhile a revision application has be en filed before the Commisioner against the same order of t he Appellate Assistant Commissioner	 it will not be open 10 t he Commissioner to pass any order in revision against the ord er of the Appellate Assistant Commissioner as the latter wi ll have merged with the order of the Appellate Tribunal. It is immaterial that the appeal and the revision application ha ve not been filed by the same party. This would be plainly so as in the present case	 the subject matter of the appe al before the Appellate Tribunal is the same as that of t he revision application before the Commissioner. Here	 t he subject matter of the appeal before the Appellate Tribun al was the valuation of the shares held by the respondent. So it was also in the revision application before the Commi s sioner. In the circumstances	 we are unable to agree with t he reasoning adopted by. the High Court. The High Court h as proceeded on the view that it was open to the Commission er to dispose of the revision applications filed by the r e spondents. The High Court	 it seems to us	 omitted to co n sider that the appeals filed before the Tribunal had be en disposed of	 and the impugned order of the Appellate Assis t ant Commissioner must be taken to have merged in the ord er of the Appellate Tribunal. The revision applications	 in short	 had become infructuous. What the respondent should have done	 on coming to kn ow of the filing of the appeal by the Revenue before the Appe l late Tribunal	 was to have withdrawn the revision petitio ns filed before the Commissioner and filed her own appea ls before the Appellate Tribunal with an application for cond o nation of delay under sub section (3) of section 24	 in case t he period of limitation had expired	 and accordingly both t he sets of appeals would have been disposed of by the Appella te Tribunal. In case the respondent came to know of the fili ng of the appeals by the Revenue before the Appellate Tribun al and had not yet applied in revision to the Commissioner s he should not have filed the revision 136 applications but should have preferred her own appea ls before the Appellate Tribunal. It must be noted that t he Appellate Tribunal is a superior body to the Commissione r	 as will be clear from sub section (1) of section 26 which provid es that an appeal will lie to the Appellate Tribunal from an order under sub section (2) of section 25 of the Commissioner. The re would have been no difficulty in the Appellate Tribun al considering the appeals of both parties and passing suitab le orders in regard to the valuation of the shares. There is no difficulty now in dealing with such a situation in view of sub section (2A) of section 24. In the case of the other respondents	 there is a simil ar history of proceedings with similar orders passed therei n	 and this judgment will be considered as disposing of t he appeals filed here in those cases also. In the result	 the appeals are allowed and the impugn ed orders of the Division Bench and the Single Judge on t he writ petitions are set aside and the writ petitions a re dismissed. In the circumstances of the case there is no order as to costs. H.L.C. Appeals allowed.

Summary:
Sub section (1) of section 25 of the Wealth Tax Act	 1957 inves t ing the Commissioner with the power to revise an ord er passed by any authority subordinate to him stipulates in c l. (b) of the proviso thereto that the power of revision sha ll not extend to an order which is the subject of an appe al before the Appellate Assistant Commissioner or the Appella te Tribunal. The respondent	 a share holder in a company	 adopte d	 for the purpose of assessment under the Act	 valuation of shares at their breakup values with paid up capital a nd reserves which was rejected by the Wealth Tax Officer w ho estimated their value on the basis of capitalisation of profits for the assessment year 1960 61 and on the basis of the break up value with certain modifications for the a s sessment years 1958 59 and 1959 60. The respondent 's appea ls were partly allowed by the Appellate Assistant Commission er against which the Commissioner of Wealth Tax preferr ed appeals to the Appellate Tribunal. The Appellate Tribun al dismissed the appeals. During the pendency of the appea ls before the Tribunal	 the respondent preferred revisi on applications to the Commissioner of Wealth Tax and contend ed that the valuation of the shares adopted by the Appella te Assistant Commissioner was unreasonable and excessive a nd should be duly modified. The Commissioner rejected t he applications on the ground that they were incompetent in view of cl. (b) of the proviso to sub section (1) of section 2 5. Against that order the respondent filed a writ petiti on which was allowed by a Single Judge of the High court hol d ing that the revision applications were competent since t he aforesaid provision would not operate as a bar against an assessee in a case where the appeal before the Appella te Tribunal is filed by the Revenue. An appeal filed again st his order was 132 dismissed by a Division Bench of the High Court. Allowing the appeal	 HELD: Where an appeal is filed before the Appella te Tribunal against an order of the Appellate Assistant Commi s sioner	 the impugned order merges in the order of the Appe l late Tribunal when the appeal is disposed of on merits. If meanwhile a revision application has been filed before t he Commissioner against the same order of the Appellate Assis t ant Commissioner	 it will not be open to the Commissioner to pass any order in revision against the order of the Appe l late Assistant Commissioner as the latter will have merg ed with the order of the Appellate Tribunal. It is immateri al that the appeal and the revision application have not be en filed by the same party. This would be plainly so as in t he present case	 the subject matter of the appeal before t he Appellate Tribunal is the same as that of the revisi on application before the Commissioner. [135B D] In this case the High Court omitted to consider that t he appeals filed before the Tribunal had been disposed of	 a nd the impugned order of the Appellate Assistant Commission er had merged in the order of the Appellate Tribunal renderi ng the revision applications infructuous. What the responde nt should have done was to file her own appeals before t he Appellate Tribunal. It must be noted that the Appella te Tribunal is a superior body to the Commissioner	 as is cle ar from sub section (1) of section 26 which provides that an appeal sha ll lie to the Appellate Tribunal from an order under sub section ( 2) of section 25 of the Commissioner. There would have been no difficulty in the Appellate Tribunal considering the appea ls of both parties and passing suitable orders in regard to t he valuation of the shares. [135F G; 136A B]