A. KALYANSUNDHARAM, A.M. These are two appeals by Revenue who is aggrieved by order of AAC who has annulled assessment made by WTO. Before us Mr. Gujrati, ld. departmental representative submitted that t h e present assessment by WTO was as consequence of direction contained in order of AAC dt. 20th June, 1981. Referring to order of AAC submission of Mr. Gujrati was that AAC directed WTO to re- examine question of valuation of assessee's residential property at 10- Manoramaganj. Indore, in light of provisions of r. 1BB. He had further directed that on this basis if value so arrived at is not lesser than value shown by assessee, than reference to Valuation Officer under s. 16A would be unnecessary or invalid. He then referred to copy of letter dt. 15th Nov., 1983 addressed by assessee to WTO in which assessee had submitted that in case WTO is proposing to value property otherwise than under s. 1BB, then he should consider such objections as were made before Valuation Officer and also give deductions of repairs at 1/6th of ALV, 6 per cent for collection charges and also adopting multiplier of 10. Shri Gujrati submitted that AAC's order dt. 20th June, 1981 does not specifically say that r. 1BB applies to case and, therefore, WTO when he took steps to reframe assessment, examined issue of applicability of rule 1BB and was of view that in view of portion used for self residence being less than 2/3rd of built-up area, rule 1BB does not apply. When rule 1BB did not apply, WTO has no other alternative but to follow order of WTO under s. 16A(5). On this ground he submitted that ld. AAC by means of his present order has wrongly annulled assessment and has led dangerous precedent for future by holding that WTO has disregarded his directions while in fact WTO has followed his order to latter. Even assuming that WTO has not followed his directions then it would be duty of AAC to decide issue on merits. As he has ample powers to decide issue on merits which he did not care to do. It was, therefore, pleaded that annulling is bad and at best he could only set-aside assessment. Reliance was placed on Kapoorchand Shrimal vs. CIT (1981) 24 CTR (SC) 345: (1981) 131 ITR 451 (SC). On other hand, argument of ld. counsel for assessee Mr. Joshi, was that AAC has given specific direction in his order to apply r. 1BB. In case Department has aggrieved at that point of time that r. 1BB could not have been applied and had been wrongly held to be applicable in case then Department should have preferred second appeal to Tribunal which he did not do. Since no second appeal was preferred which goes to establish that Departmental Representative has accepted order of AAC and thereby only duty of WTO was to apply rule 1BB and arrive at value of property. Once direction has been given by AAC it would b e duty of WTO to follow it and he would have no jurisdiction of re- examining issue as it would tantamount to over-stepping jurisdiction or authority which has already been limited by order of AAC. Reliance was placed on Pulputi Subbarao & Co. vs. AAC (1959) 35 ITR 673 (AP), Surendra Overseas Ltd. vs. CIT (1979) 120 ITR 872 (Cal) and CIT vs. Bandaru Sanyasi Raju (1980) 19 CTR (AP) 146: (1981) 127 ITR 453 (AP). We have given our careful consideration to arguments of both parties. first issue for our consideration is whether direction of AAC i s specific or general in nature. We therefore, reproduce directions as are contained in last paragraph of his order dt. 10th June, 1981: "In view of above decision, which we respectfully follow we set aside order of AAC and WTO with direction that he should re-examine t h e question of valuation of assessee's residential property at 10, Manoramaganj, Indore, in light of provisions of r. 1BB of WT Rules, 1957. If, by taking into account r. 1BB, value shown by assessee is not less than value arrived at by application of that rule, reference to Valuation Officer under s. 16A of Wt Act would be unnecessary or rather invalid and WTO will not be bound by said report. WTO is accordingly directed to determine value of said property in light of above directions and recompute net wealth of assessee. In reforming assessments he should allow reasonable opportunity of being heard to assessee". reading of above direction of AAC gives indication that AAC directed WTO to re-examine question of valuation of assessee's property in light of provisions of r. 1BB. He had also been directed to consider value as returned by assessee that it is not lower than value arrived at by that rule in which case no reference to Valuation Officer would be necessary. WTO, however, understood this direction of AAC to mean that he was to examine applicability of rule 1BB to facts of case and came to conclusion that since less than 2/3rd of builtup area was used for self- residence, rule 1BB would not apply. This particular action of WTO is totally unwarranted as has been rightly held by Andhra Pradesh High Court in case of CIT vs. Bhandaru Sanyasi Raju (1980) 19 CTR (AP) 146: (1981) 127 ITR 453 (AP) and also by same High Court in its earlier judgment in case of Pulipati Subbarao & Co. vs. AAC (1959) 35 ITR 673 (AP) and by Calcutta High Court in case of Surendra Overseas Limited vs. CIT (1979) 120 ITR 872 (Cal). Now question that remains to be answered is consequent to misreading of direction of AAC assessment so made by WTO should have been annulled by AAC or not. proper course, in these circumstances, for AAC, should have been to make observations in his order that his directions have not been properly appreciated by WTO after which he should have proceeded ahead to decide issue on merits as well. applicability of rule 1BB has not been disputed by Department as otherwise if it were disputed by them they would have preferred appeal to Tribunal against order of AAC dt. 20th June, 1981. In absence of such appeal filed by Department it would be totally out of jurisdiction of WTO to have examined validity of applicability of rule 1BB to facts of case. In that event AAC, should have himself by applying rule 1BB at value of property instead of annulling assessment as whole, as it tantamounts to cancellation of decision already taken by his predecessor vide his order dt. 2nd June, 1981 for which he has no powers under Act and also which finding has been accepted even by assessee. We, therefore, set aside order of AAC and direct him to value property in accordance with rule 1BB as was decided by order dt. 20th June, 1981. We draw support from ratio laid down by Supreme Court of India in case of Kapoorchand Shrimal vs. CIT (supra). Their Lordships have clearly laid down that it would be duty of appellate authorities to correct all errors in proceedings under appeal and especially when particular procedure prescribed by law had not been followed then it would be all more necessary for appellate authority to direct assessing authority to pass fresh order in accordance with law but also give specific directions and manner of making of assessment which directions have to be in accordance with law. In result, Departmental appeals are allowed on these terms. *** WEALTH-TAX OFFICER v. K.C. LAL