Law: Wealth Tax Act, 1957

Section: 35,rule3,PartII of ScheduleI

Law: Income Tax Act, 1961

Section: 6(6)

(a) Wealth tax-----Rectification---Status declared as "not ordinarily resident" ---Concessional rate of 50 percent of tax applicable to non-resident granted in original assessment---Rectification to withdraw concessional benefit---Concession applicable to non-resident granted to resident a mistake apparent from record---Rectification justified---Indian Wealth Tax Act, 1957, S. 35, Sched. I, Part II, R.3. (b) Wealth tax-----Residential status---Two separate categories, resident and non-resident only---Persons "not ordinarily resident" or "ordinarily resident"---Fall under category of resident---Indian Wealth Tax Act, 1957, S.6. There are two broad categories in the classification of the assessee under the Wealth Tax Act, 1957. The first category is a resident and in that category there is a sub-classification (a) resident and ordinarily resident; (b) resident but not ordinarily resident. The second category is non-resident. Under the scheme of the Act the two categories are two separate water tight compartments except in cases specifically provided for in that Act itself and if the assessee falls in the category of resident whatever may be the sub-classification in that category he cannot be treated as a non-resident. The assessee filed her returns of wealth for the assessment years 1975-76 to 1978-79 declaring her status to be person "not ordinarily resident" in India. The Wealth Tax Officer granted rebate of 50 per cent, of tax available to a non-resident under rule 3 of Part II of Schedule I to the Wealth Tax Act, 1957, and completed the assessment. Later, it was found that the assessee was a resident and was not a non-resident and in order to withdraw the concessional benefit granted in the original assessment, the Wealth Tax Officer passed orders of rectification. The Tribunal held that since the question whether a "not ordinarily resident" assessee could be considered as a non-resident was a debatable issue which could not be regarded as a mistake apparent from record, the assessments could not be rectified under section 35 of the Wealth Tax Act, 1957. On a reference: Held, that the assessee by showing her status to be a resident but not ordinarily…

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