COMMISSIONER OF WEALTH TAX Vs. H R GANDHI

JUDGEMENT

(1.) THE Tribunal has referred the following questions of law or the opinion of the Court which arise out of the order dt. 18th Jan., 1975 of the tribunal in WT Appeal Nos. 27 to 29 (Delhi) of 1974-75

(2.) FEW relevant facts may be noted which have given rise to the present reference. The assessee owned a house property bearing No. 14, Golf Links, New Delhi. This property was originally valued by the assessee at Rs. 3,57,000. The ground floor was in the occupation of the assessee whereas the first and second flowers with two annexes were render out at Rs. 3,000 per month. The rental value of the ground floor was stated to be Rs. 2,000 per month. On the basis of this valuation, the WTO made an assessment under S. 16 (3) of the WT Act 1957 ('the Act') on 17th Jan., 1972. Thereafter notices, Annexure D, E, and F, under S. 17 for the asst. yrs. 1967-68 to 1969-70 were issued and reassessment was made by the WTO on 31st March, 1973. In the reassessment, the rental valuation of the ground floor was estimated at. Rs. 3,500 per month. On that basis the total valuation of the property was arrived at Rs. 12,45,320. On that basis reassessment was made. The assessee went in appeal before the AAC (Special Range), New Delhi, in which the appeals were not allowed and thereafter further appeals were preferred before the tribunal.

(3.) WE have heard Shri B. Gupta the learned counsel for the Department. The main question that arises for consideration is as to whether the WTO was justified in invoking the provisions of S. 17 (1)(b) in the present case. Under S. 17(1)(b) power could be exercised only when the WTO has, in consequence of any information in his possession, reason to believe, notwithstanding the fact that there has been no such omission or failure as is referred to in cl. (a) that the net wealth chargeable to tax has escaped assessment for any year, whether by reason of under assessment or assessment at too low a rate or otherwise. The jurisdiction of the WTO to reassess the wealth arises only when he has in consequence of information in his possession reason to believe that wealth chargeable to tax has escaped assessment.