JUDGMENT
Madam, J.
1. Brijraj Singh (petitioner) is son of Maharao Bhim Singh Ex-ruler of Kota whose property renowned as Ummed Bhawan Palace having 973 acres of land duly recognised as his official residence and in his occupation, is subject matter of the assessment and reassessment by order dated 27.3.97 (Ann. 6) of the respondent No. 2 for the year 1983-84 passed under the Wealth Tax Act, 1957 (for short “WT Act”).
2. Albeit wealth tax assessment of year 1983-84 admittedly had been completed under Section 16(3) on 15.3.88 on total wealth of Rs. 41,41,000/- but has subsequently been revised under Section 35 on net wealth of Rs. 2,38,000/- by reduction of Land & Building Tax of Rs. 40,62,200/-. However, this assessment dated 15.3.88 was reopened by the Revenue by initiating proceedings under Section 17(2)/16(3) of the WT Act while issuing notice to the assessee (petitioner) to show cause as to why additions/disallowances on the following points be not made in his wealth:-
1. Land and building tax liability of Rs. 40,62,000/- wrongly allowed as it relates to the assets which is already claimed and allowed as exempted assets hence not admissible as per provisions of Rule 2(m).
2. Value of land requisitioned by the defence on annual compensation was not included in the net wealth due to claim of wrong exemption under Section 5(1)(iii).
3. Annual compensation received/receivable by the assessee on the said land as per point (2) above.”
After hearing the parties, net wealth of the assessee (petitioner) was computed as under:
Net wealth assessed as per Order under Sec. 16(3)/35
Rs. 2,39,748=00 p.
Add:
(i)
Value of land requisitioned by the defence at
Rs.
6,66,65,670=00p.
(ii)
L & B Tax Liability
Rs.
40,62,000=00p.
(iii)
Annual compensation receivable for defence accrued till
assessment year 1983-84
Rs.
2,14,23,560=00p.
Rs.
9,23,90,978 = 00p.
Less : Current year’s WT liability
Rs.
43,55,520=00p.
Net Wealt
Rs.
8,80,35,458=00p.
3. Upon aforesaid computation and assessment of the net wealth under order dated 27.3.97 (Ann. 6) by the respondent No. 2, notice under Section 17(1)(c)/18(2) of the WT Act was ordered to be issued. Hence this writ petition.
4. Though the petitioner accepted that an appeal against assessment order impugned herein had been filed but it is his case that since the impugned order was without jurisdiction, it has been challenged in this writ petition, inasmuch as the issuance of notice under Section 17 of the WT Act without subsisting any ground was bad.
5. Show cause notice for admission of this petition was issued on 30.9.97 to the respondents (Union of India & Assistant Commissioner WT Circle Kola) who were served. But upon application for impleadment moved on 2.11.98, this Court by order , dated 18.3.99 allowed the Income Tax Officer (I) Kota to be impleaded as respondent No. 3, on whose behalf reply to the writ petition has been filed on 7.4.99, to which rejoinder has also been filed by the petitioner.
6. It is pertinent to mention that on 29.4.99 application for amendment in the writ petition by annexing therewith notices dated 25.3.99 for the years 1986 to 1996 as Schedule B was moved by the petitioner but curiously enough, as is evident from this Court’s order dated 18.9,2000, this amendment application was sought-on behalf of the petitioner to be withdrawn and this Court allowed the petitioner to withdraw this amendment application.
7. Shri J.K. Singh learned counsel for the petitioner assessee contended that the assessment for the year 1983-84 had been completed on 15.3.88 granting benefits of the Board’s circular (Ann. 2) so also Section 5(1)(iii) of the WT Act but subsequently the respondent No. 2 reopened the assessment and passed order dated 27.3.97 (Ann. 6) illegally by erroneously interpreting order (Ann. 2) on the ground of putting Ummed Bhawan tend to other use, and without considering that it was not voluntarily but the disputed Bhawan was put to other use i.e. for defence purpose, as such the reassessment order (Ann. 6) is liable to be quashed.
8. Per contra, Sarva Shri R.B. Mathur & Ashok Gaur appearing for the Revenue (WT & IT departments) laid much stress on the availability of alternative remedy to the petitioner against the impugned reassessment order and further it has been contended that admittedly the petitioner has concomitantly preferred an appeal against the self same reassessment order (Ann. 6) before the Commissioner (Appeals) Wealth Tax Ajmer who had remanded the matter for fresh decision while setting aside impugned order, itself, and since the matter is sub judice before the respondent No. 2 thereby this writ petition is an illusory attempt having no cause of action to approach- this Court, inasmuch as there being disputed questions of fact involved in this petition, the same cannot be agitated in this petition by invoking writ jurisdiction. Various decisions have been cited in this regard.
9. As regards challenge to the impugned assessment order so also the petitioner’s claim for exemption, it has been contended by the Revenue that the exemption from WT as contemplated under Section 5(1)(iii) of WT Act is only for any one building in possession of a Ruler, and the Wealth Tax in case of the petitioner as Ex Ruler had been levied on the parts of the building which has admittedly been let out by the Ruler on receipt of its compensation, inasmuch as the decisions cited by the petitioner in view of the decision of the Apex Court in Mohd Ali Khan v. Commissioner of WT (1), goes against him if it Is carefully looked into because as per which only the building or its part in occupation of the Ruler which has been declared by the Central Government as official residence under the Merged States (Taxation Concessions) Order, 1949 will not be included in the net wealth of the assessee.
10. Having heard the learned counsel for the parties and considered the rival contentions, the controversy centres around the issue and claim of the petitioner in respect of Ummed Bhawan Palace as to the exemption from payment of Wealth Tax by virtue of Section 5(1)(iii) of the WT Act which is equivalent and parallel Clause (19A) in Section 10 of IT Act for income tax exemption in case of an ex-ruler. Sections 10(19A) of the IT Act & 5(1)(iii) of the WT Act are reproduced herein.
11. Admittedly, under the Merged States (Taxation Concessions) Order, 1949 this Palace ‘Ummed Bhawan Compound’ was declared to be an official residence. Section 10(19A) of the Income Tax Act, as amended by the Rules of Indian States (Abolition of Privileges) Act, 1972, reads as under:-
“(19A) the annual value of any one palace in occupation of a Ruler, being a palace, the annual value where of was exempt from income tax before the commencement of the Constitution (Twenty-sixth Amendment) Act, 1971, virtue of the provisions of the Merged States (Taxation Concessions) Order, 1949, or the Part B States (Taxation Concessions) Order, 1950, or, as the case may be, the Jammu & Kashmir (Taxation Concessions) Order, 1958:-
Provided that for the assessment year commencing on the 1st day of April 1, 1972, the annual value of every such palace in the occupation of such Ruler during the relevant previous year shall be exempt from income tax.”
Section 5 dealing with exemptions in respect of certain assets-
“5. Exemptions in respect of certain assets- Wealth tax shall not be payable by an assessee in respect of the following assets and such assets shall not be included in the net wealth of the assessee.
(i) xxx xxx xxx
(ii) xxx xxx xxx
(iii) arty one building in the occupation of a Ruler, being a building which immediately before the commencement of the Constitution (Twenty-sixth Amendment) Act, 1971, was his official residence by virtue of a declaration by the Central Government under paragraph 13 of the Merged States (Taxation Concessions). Order, 1949, or paragraph 15 of the Part B States (Taxation Concessions) Order, 1950.”
12. The significant words in afore quoted provisions are one palace in the occupation of a Ruler” used in Clause (19A)of Section 10 of the IT Act whereas, ‘one building in occupation of a Ruler’ used in Section 5(1)(iii) of the WT Act. Thus, under Section 10(19A) of the IT Act only one palace inoccupation has been exempted. It seems that similarly in the WT Act instead of “palace” they have used the words “one building in occupation of a Ruler” which has been exempted from tax. Under both the quoted provisions, it should be a “palace” or ‘building” which under the Merged States (Taxation Concession) Order, 1949 was declared as an ‘official residence’. Even under the Merged States (Taxation Concessions) Order, 1949, all buildings and palaces declared as the ‘official residence’ were declared exempt from tax. Clause (19A) of Section 10 and Section 5(1)(iii) both were incorporated by the Rulers of Indian States (Abolition of Privileges) Act, 1972 w.e.f. December 28, 1971 and 9.9.1972 respectively.
13. However, as per language of Sub-section (I9A), ibid, it is crystal that the exemption which was available for a number of palaces (declared as “official residence” under the Merged States (Taxation Concession) Order, 1949) was limited to only one palace in occupation. Undisputably the property in question is a palace not only renown as Ummed Bhawan Palace but also declared as “official residence” of Ex-ruler-father of the petitioner. The only question raised by the Revenue is that if only a portion of the palace is in occupation, the exemption under Section 10(19A) of the IT Act or under Section 5(1)(iii) of the WT Act would be available only for that part in occupation and not for the whole. A similar controversy had arisen in CIT v. Bharatchadra Banjdeo (2), though it relates to the claim of exemption by ex-ruler under the IT Act but it was held that Clause (19A) does not contemplate further splitting up of portions of a palace into residential and let out portions. Therefore, even if only a part of a palace is in the occupation of a Ruler and the rest has been let out, the exemption will be available for the entire palace. If the legislature intended a further splitting up, it would have been provided in Clause (19A) of Section 10 of the !T Act that such portion of the palace in occupation is only exempt but it seems that the language used by the Legislature did not contemplate a further splitting up. Even while following the decision in CIT v. Bharatchadra Banjdeo (supra) this Court (DB of J.S. Verma, CJ & I.S. Israni, J., as they then were) dealing with selfsame Ummed Bhawan Palace’s matter as to the exemption claimed by the petitioner’s father Maharao Bhim Singh under Section 10(19A) of the IT Act for the assessment years 1973-74, 1974-75, 1875-76, 1976-77 & 1977-78 in CIT v. Maharao Bhim Singh (3), held as under: –
“So far as the first question relating to exemption claimed under Section 10(19A) is concerned, there is a direct decision in CIT v. Bharatchandra Banjdeo (1985 (154) ITR236 (MP). It was held therein that it is no! possible to split up one palace into parts for granting exemption only to that part in self occupation of the ex-Rulers as his official residence and to deny the benefit of exemption to the other portion of the palace rented out by the Ruler, since the entire palace is declared as his official residence. Accordingly it was held that even if only a part of the palace is in the self occupation of the former Ruler and the rest has been let out, the exemption available under Section 10(19A) will be available to the entire palace. No decision taking a contrary view has been cited before us. We do not find any good ground to depart from that view, when the view taken in that decision is undoubtedly a plausible view. In the case of a taxing statute, a plausible view in favour of the assessee should be preferred in these circumstances. Following that decision the first question has to be answered against the Revenue and in favour of the assessee”
14. In Mohd. Ali Khan v. Commissioner of WT (supra), cited by the Revenue, the Apex Court dismissing the appeal of the assessee held that a fair reading of Section 5(1)(iii) of the WT Act would reveal in occupation of the Ruler which has been declared by the Central Government to be the official residence under the Merged States (Taxation Concessions) Order, 1959, will not be included in the not wealth of the assessee. The Apex Court held as under:
“Therefore, the buildings of the Khas Bagh Palace which were let to -different persons and for which rent was received, were not in occupation of the appellant within the meaning of Section 5(1)(iii) of the Act and the value thereof was includible in the net wealth of the appellant.”
“The intention of the Legislature is primarily to be gathered from the language used. Just as it is not permissible to add words or to fill in a gap or lacuna, similarly it is of universal application that effort should be made to give meaning to each and every word used by the Legislature.”
15. With due respects, the decision in Mohd. All Khan v. CWT (supra) does not help the Revenue because it was a case where the buildings of the Khas Bagh Palace were let to different persons and for which rent was received, therefore buildings in dispute were held as not in occupation of the appellant within the meaning of Section 5(1)(iii) of the Act and the value thereof was held includible in the net wealth of the appellant, whereas in the instant case, Ummed Bhawan Palace in occupation of the Ex ruler (petitioner) declared as Official residence by the Central Government under the Merged States (Taxation Concessions) Order, 1949, in fact was not let out but its appurtenant land was requisitioned by the Collector Kota for defence purpose in the year 1976, which was not voluntary act on part of the petitioner to earn wealth or income in receipt of the recurring compensation against such requisition of land 918.26 acres appurtenant to Ummed Bhawan Palace Compound, inasmuch as the Official residence declared as Ummed Bhawan Palace compound which included the requisitioned land also, which cannot further be splitted up for the purpose of exemption under Section 5(1)(iii) of the WT Act, nor provisions’ of exemption do contemplate further splitting up of portions of a building declared as official residence into residential and let out portions. Therefore, even if only a part of a palace or building is in the self-occupation of a Ruler and the rest has been let out, the exemption will be available for the entire palace. I lend support from the afore quoted dictum of law laid down in similar circumstances for selfsame building renown as Ummed Bhawan Palace which is subject matter here also and accordingly in my considered view it is indefeasible to split up one palace or building into parts for granting exemption only to that part in self occupation of- the ex-Ruler as his official residence while to deny the benefit of exemption to the other portion of the palace or building let out by the Ruler & especially when the building & its appurtenant land is requisitioned for defence purpose by the Central Government which was beyond the control of the petitioner against recurring compensation since the entire palace & building alongwith its appurtenant land is declared as his official residence.
16. Moreover for the self same subject matter Palace or building renown as Ummed Bhawan Palace, the respondents taxing authority have been continuing to grant exemption not only under the IT Act but also the WT Act in previous assessment years and that apart even upon the challenge by the Revenue itself by approaching this Court in reference, they failed. In D.B.IT Reference Application No. 41/80 for assessment years 1973 to 1978 (173 ITR 79) (4) for self same Ummed Bhawan Palace, the exemption available under Section 10(19A) of the IT was allowed; so also this Court (DB) by order dated 10.8.87 (Ann. 5) Commissioner WT v. Maharao Bhim Singh) rejected D.B.WT Reference application No. 84/87 (which related to assessment years 1970-71 to 1977-78 & against order dated 10.6.85 holding Ummed Bhawan Palace of Ex. ruler exempt under Section 5(1)(iii) of the WT Act) pointing out that admittedly the assessee has to be given benefit of Circulars issued by the Board, which has been done by the order of review. The Central Board of Direct Taxes by Circular No. F.517(7)/84 WT Act dt. 29.8.84 (Ann. 2) has clarified that the entire land appurtenant to Ummed Bhawan Palace and its compound is exempt from levy of wealth tax.
17. As regards the L & B tax liability deduction, this matter stands settled by virtue of the decision of the Appellate Authority, and the Revenue has accepted the deduction, to which also no Reference was made before this Court or SLP before the Apex Court and therefore, the matter stood concluded requiring no review by way of reassessment under challenge, inasmuch as issue of compensation having been accorded on requisition of land by the Central Government for defence purpose long back in the” year 1976 cannot be agitated again for reassessment under Section 17 of the WT Act in peculiar facts & circumstances narrated above. Thus, viewed, 1 find and hold that despite the matter having stood concluded by virtue of decisions of this Court for previous assessment years, viz. judgments dated 10.8.87, 12.8.87 and 10.10.2001, the respondents in uttar disregard thereof adhered to reopen the assessment and passed the reassessment under challenge and this clearly shows arbitrariness and whims on their part which requires to be interfere with by invoking extra ordinary jurisdiction of this Court irrespective of the fact that the petitioner inso far as the impugned reassessment is concerned has got alternative remedy or availed of it by way of preferring appeal, may be that has been decided in his favour by way of remand. Hence I find no merit in any of the contentions raised by the Revenue in this regard. On the basis of aforesaid conclusions, the Revenue is bound to close the matter wherever pending either before the assessing or appellate authority holding that the reopening of the assessment already concluded by dint of decisions of this Court in exercise of jurisdiction under taxation law is’not permissible either under Section 17 of the WT Act or 147/148of the IT Act.
18. Since the petitioner himself withdrew amendment application, hence I do not say as to documents annexed with that amendment application except to grant liberty to the petitioner to approach the appropriate authority to get redressal of his grievance on the basis of aforesaid conclusions.
19. Resultantly, this writ petition is allowed with no order as to costs. The impugned order dated 27.3.97 (Ann. 6) of the respondents is quashed & set aside by issuing a writ of certiorari. The respondents are directed to act upon in the matter of wealth tax & income tax as regards Ummed Bhawan Palace compound & its appurtenant land duly requisitioned by the Central Government after having declared as Official Resident, in the light of aforesaid conclusions.