COMMISSIONER OF WEALTH TAX Vs. S EAPEN

JUDGEMENT

(1.) IN tax case petitions, the Department requested this court to direct the Tribunal to refer the following two common questions, for the opinion of this court, under section 27(3) of the Wealth-tax Act, 1957 :

(2.) THE assessee owned movable and immovable properties. For the assessment years 1972-73 to 1974-75, the Wealth-tax Officer adopted the value of the non-agricultural lands at Rs. 2,000 per cent. Later, he came to know that the assessee had gifted 23 cents of the land to a church in June, 1975, and the lands gifted were valued at Rs. 3,800 per cent. THE Wealth-tax Officer found that as the assessee himself had valued the gifted land at Rs. 3,800 per cent, the value as adopted in the aforesaid assessments resulted in underassessment. For the said reason, he reopened the assessments under section 17 of the Wealth-tax Act, 1957. THE assessee gave his consent for the reopening of the assessment. In the reassessment made under section 17(1)(b) of the Wealth-tax Act, 1957, the Wealth-tax Officer adopted Rs. 3,000 per cent for the assessment year 1972-73 and Rs. 3,500 for the assessment years 1973-74 and 1974-75. In respect of the regular assessments for the assessment years 1975-76 to 1977-78, the Wealth-tax Officer adopted the value of the lands at Rs. 8,546 per cent; Rs. 10,546 per cent and Rs. 11,646 per cent, respectively.

(3.) THE gift was made in June, 1975, relevant for the assessment year 1976-77. It is the case of the assessee that the valuation as furnished by the assessee in the assessment year 1976-77 cannot govern the market value of the land on the relevant valuation dates. THE assessee also submitted that there was no relevant information before the Wealth-tax Officer in order to validly reopen the assessments. Simply because the assessee consented for reopening, that would not constitute an information, entitling the Wealth-tax Officer for reopening the assessments under section 17(1)(b) of the Wealth-tax Act. THE satisfaction of the statutory requirement does not find a place in the order passed by the Wealth-tax Officer for reopening the assessments. THE information that had come into the possession of the Wealth-tax Officer was the gift made by the assessee in 1976 or the sale made in 1978. THE Tribunal pointed out that neither of these two circumstances justify a conclusion that the value of the property on the respective valuation dates, relevant to the years now under consideration, was underassessed. It is only on account of suspicion the assessments were reopened. Suspicion, however, strong, cannot transform into information. Inasmuch as there was no valid information entitling the Wealth-tax Officer to reopen the assessment, the Tribunal held that the reopening was bad. THE conclusion arrived at by the Tribunal that the reassessment made by the Wealth-tax Officer was bad, appears to be well-founded.