Law:

Section:

Section 7(4) of the Wealth-tax Act, 1957 - Valuation of assets - Residential house - Whether sub-section (4) of section 7 is procedural in nature and, therefore, it would be operative retrospectively - Held, yes - Whether even where assessment proceedings were pending at appellate stage, when said sub-section (4) was inserted in the statute, proceedings would be considered to be pending for retrospective operation of said sub-section (4) - Held, yes Facts For the assessment year 1975-76, the assessee claimed that the bungalow which was exclusively used by him for residential purposes throughout the relevant previous year should be valued as provided in section 7(4) and, therefore, the market value of the bungalow should be taken as on the valuation date relevant to the assessment year 1971-72. However, the WTO rejected the assessee's claim and valued the bungalow as on the valuation date, i.e., 31-3-1975. On appeal, the Commissioner (Appeals) allowed the assessee's claim and directed the WTO to adopt the value of the bungalow as per section 7(4). On appeal by the revenue, the Tribunal restored the WTO's order. On reference, the revenue contended that the provisions of section 7(4) would apply only from the assessment year 1976-77. On the other hand, it was contended by the assessee that section 7(4) was procedural and, therefore, it applied retrospectively in the sense that it would apply to all pending assessment proceedings for the assessment years subsequent to the assessment year 1971-72. Held The statute which takes away or impairs any vested right or creates new obligation must be considered not to have been intended to apply retrospectively, but if the law deals with matters of procedure only it is deemed to be retrospective unless such inference is likely to lead to unjust results. In view of the settled position of law, sub-sections (1) and (2) of section 7 are machinery provisions and they provide for method of valuing assets of the assessee for the purpose of ascertaining the net wealth. Sub-section (4) of section 7 which gives option to the assessee to value his house used for the purpose of his residence under either sub-section (7) or sub-section…

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