' EJAZ AFZAL KHAN, J.---Messrs Pakistan International Public School Abbottabad, appellant herein, filed this appeal under section 27 of the Wealth Tax Act, 1963 (Act No,XV of 1963), with the following questions:--
(1) Whether on the basis of facts obtaining on W. Tax record of the appellant where securities claimed as debts were allowed in the original assessments by the Assessing Officer after consulting the income tax record, rectification made by the same Assessing Officer under section 35 was not merely a change of opinion?
(2) Whether on the basis of income, tax assessments framed from year to year, where securities refundable to students were accepted by the Income Tax Department as source and liabilities against the construction of school building, the learned Bench of the Tribunal was right to hold that refundable securities are not loan or debts, hence, not admissible as debts within the meaning of section 2(1)(16)(ii) of the Wealth Tax Act, 1963?
(3) Whether in view of the fact that there was no factual error or omission in the original assessm ents, the learned Bench of the Tribunal was right in law to hold that mistake was apparent from the record and consequently rectification was rightly made under section 35 of the Wealth Tax Act, 1963?
(4) Whether on the basis of proven case history where securities refundable as disclosed from year to year were accepted by the Income Tax Department as source of investment against school's building in the past, the learned Bench of the ITAT was right to hold that appellant has failed to establish that these securities were spent on the construction of school building?
2. The learned counsel appearing on behalf of the appellant, argued that where the refundable securities of the students are debts within the meanings of section 2(16)(ii) of the Wealth Tax Act and have been incurred in relation to the assets in respect of which wealth tax has been paid, the liabilities arising therefrom were rightly allowed in the original assessment order. The learned counsel by referring to the case of Commissioner of Wealth Tax v. Hoor Bai Ibrahim (1992 PTD 1972) argued that as the expression 'debt owed' has not been defined in the Act, it is to be construed in its ordinary dictionary meaning which means and contemplates something that is owed especially money or a state of obligation to pay something owed. He by concluding his arguments urged that where the mistake was not apparent from the record, there was no occasion whatever to rectify it by invoking the application of section 35 of the Act.
3. As against that, the learned counsel appearing on behalf of the respondent, argued that securities cannot be treated as debts, therefore, they have rightly been taxed especially when nothing in black and white has been brought on the record in the form of Bank statement to show their refund. The learned counsel by referring to section 35 of the Act, argued that where a liability was wrongly allowed by the Wealth Tax Officer in his original order, it being an error apparent from the record was rightly rectified.
4. We have gone through the record carefully and considered the submissions of the learned counsel for the parties.
5. The question whether the formulations projected by the questions enumerated above, are questions of law or questions of fact, cannot be answered unless we have a clear perception of what is a question of law and what is a question of fact.
6. The term question of law is used in three distinct but related senses. It in 'he first place means a question which is authoritatively answered by the law it3elf. In the second sense it means a question as to what the law on a particular point is or what is the true and real meaning behind a provision of law which is ambiguous. In the third sense it means a question which relates to the applicability or otherwise a provisions of law in view of the facts proved in a given case. This category of questions can also be called mixed questions of law and fact, A since their answers one way or the other depend on the existence or otherwise of certain facts. For instance the question as to what is the period of limitation for a suit for recovery of possession by an owner after his dispossession is purely a question of law but whether the suit was instituted within the period provided by the first schedule of the Limitation Act would essentially be one of fact.
7. Any other question which does not fall in any of the categories mentioned above, would be a question of fact. However, in the cases of Oriental Investment Co. Ltd. v. Commissioner of Income Tax, Bombay (PLD 1958 Supreme Court (Ind.) 151) and Shree Meenakshi Mills Ltd. Madurai. V.
Commissioner of Income Tax, Madras (PLD 1957 Supreme Court (Ind ) 188), the Supreme Court of India after reviewing a string of judgments suggested almost the same tests for determining whether a question is one of fact or law which are reproduced as under:--
(1) When the point for determination is a pure question of law such as construction of a statute or document of title, the decision of the Tribunal is open to reference to the Court under section 66(1).
(2) When the point for determination is a mixed question of law and fact, while the finding of the Tribunal on the facts found is final, its decision as to the legal effect of these findings is a question of law which can be reviewed uy the Court.
(3) A finding on a question of fact is open to attack under section 66(1) as erroneous in law if there is no evidence to support it or if it is perverse.
(4) When the finding is ones of fact, the fact that it is itself an inference from other basic facts will not alter its character as ones of fact.
8. With this perception about question of law and fact, we would like to examine the relevant provision of the Act which reads as under:--
(2) Definitions.--(1)...........................
(1) ...............................
(2) ................................
(3) ................................
(i) ..
(ii) .
(4) ...............................
(5) ..
(i)
(a) ..............................
(b) ..............................
(ii) .
Explanation.-- ............................................
(i) .
(ii) .
(iii) ..
(6) ...............................................
(7) ........................
(8) ...............................
(9) ........................................
(i)
(ii) ..
(10)
(11) ..
(12)
(13)
(14)
(15) "net wealth" means the amount by which the aggregate value computed in accordance with the provisions of the Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owned by the assessee on the valuation date other than.
(i)
(ii) debts which are secured on or which have been incurred in relation to, any asset in respect of which wealth tax is not payable under this Act;
(iii) .
Explanation.--For the purpose of this clause.-
(i) ..
(ii) ..
9. The above quoted provision would reveal that net wealth means the amount which is exclusive of debts. The word 'debt' as defined by Lord Lindlay in the case of Webb v. Stenton (1883) 11 QBD 518 at page 527, means a sum payable now or in future by reason of a present obligation. It, as defined in the case of Commissioner of Wealth Tax v. Hoor Bai Ibrahim (Supra), means an amount owed to some other person and includes an obligation to pay.
10. Now the question crops up as to what is the status of the securities and whether they can be termed as debts so as to exclude them from assets. The answer to this question depends on the existence of two facts which are envisaged by the provision itself. The first is that they must be debts by virtue of their being refundable and the second is that they have been incurred in relation to assets in respect of which wealth tax is payable. But where no evidence whatever is available on the record to prove that they being refundable have ever been refunded or have been incurred in relation to the assets on which wealth tax is payable, quite obviously, it will not be a question which falls within the first category of questions of law inasmuch as it is not authoritatively answered by the law itself. It does not fall in the second category of questions of law either, as no question has been raised as to what the law on a particular point is or what is the true and real meaning behind a provision of law which is ambiguous. It does not fall even in the third category of questions of law when the very existence of the facts attracting the applicability of the provision has not been proved. Needless to say that this category of questions cannot be answered in a void and vacuum on the basis of assumptions or surmises and conjectures.
11. As it is not the case of the appellant that the forums below have based their finding on no evidence, the question relating to securities 'cannot be brought within any of the questions of law in general and question No,3 in particular as defined in the cases of Oriental Investment Co. Ltd. v.
Commissioner of Income Tax, Bombay and Shree Meenakshi Mills Ltd. Madurai v. Commissioner of Income Tax Madras (Supra). It thus follows that formulations projected by questions Nos. 2 and 4 being essentially ones of fact would go outside the scope of section 27 of the Act and so would the ones projected by questions Nos. 1 and 3 as all being interdependent on each other, involve almost the same factual controversy.
12. When none of the formulations enumerated above, raises a question of law, this appeal being misconceived on the face of it, would call for no interference.
13. For the reasons discussed above, this appeal being without merit is dismissed.