GAURHARI SINGHANIA Vs. WEALTH TAX OFFICER

JUDGEMENT

(1.) WRIT Petition No. 543 of 1984 relates to the proceedings for assessment of wealth-tax against Padampat Singhania (individual) in respect of the year 1974-75. WRIT Petition No. 551 of 1984 relates to the assessment of wealth-tax in respect of the assessment years 1973-74 and 1974-75 of Dr. Gaurhari Singhania (Hindu undivided family), whereas WRIT Petition No. 552 of 1984 relates to the assessment of wealth-tax in respect of the assessment years 1973-74 and 1974-75 of Govind Hari Singhania (Hindu undivided family). All the three assessees mentioned above are admittedly partners of JK Bankers, a partnership firm. The admitted facts are that the proceedings for assessment of wealth-tax for the assessment years 1967-68 to 1972-73 were pending against Padampat Singhania (Hindu undivided family) and one of the questions which arose in those proceedings was in regard to the value of the assets of Padampat Singhania (Hindu undivided family) vis-a-vis his share in the partnership firm, JK Bankers. A reference was made by the Wealth-tax Officer to the Valuation Officer under Section 16A of the Wealth-tax Act. The order of reference was challenged by M/s. JK Bankers and Padampat Singhania (Hindu undivided family) in a writ petition before this court which was dismissed. The matter was taken up before the Supreme Court in Civil Appeal No. 816 of 1978. One of the questions which was canvassed before the Supreme Court was whether the interest of a karta of a Hindu undivided family in a firm was assessable to wealth-tax. This question was answered by the Supreme Court in the affirmative and it was held that the Wealth-tax Officer was justified in making the reference to the Valuation Officer. The decision of the Supreme Court is dated December 16, 1983, and is reported in Juggilal Kamlapat Bankers v. WTO [1984] 145 ITR 485.

(2.) IT appears that the proceedings for assessment in respect of the aforesaid years of the petitioners remained stayed and after the decision of the Supreme Court, notices were issued to the petitioners in May, 1984, for continuing the pending proceedings. The petitioners thereafter instituted these writ petitions asserting that the proceedings had become barred by time and consequently the Wealth-tax Officer had no jurisdiction to make any order of assessment. Reliance in these writ petitions was placed on a letter of the Wealth-tax Officer dated June 16, J984, wherein he had taken the view that the proceedings had not become barred by time. In these writ petitions, it has, inter alia, been prayed that a writ of mandamus be issued to the Wealth-tax Officer to withdraw and recall the notices issued for continuing the proceedings and to restrain him from proceeding any further in the matter of assessment.

(3.) RELIANCE was also placed by counsel for the assessees on the decision in Jiyajeerao Cotton Mills Ltd. v. ITO [1977] 107 ITR 253 (Cal) of Hon'ble Sabyasachi Mukharji J., of the Calcutta High Court. There too, a notice issued to the assessee had been challenged by it on the ground that it has been issued beyond the period of limitation. On behalf of the Revenue, reliance was placed on the two decisions of the Supreme Court in the cases of Lalji Haridas v. ITO [1961] 43 ITR 387 and Lalji Haridas v. R. H. Bhatt [1965] 55 ITR 415 in aid of the submission that the question of limitation should be raised before the authorities concerned and was not a matter to be adjudicated in a writ petition under article 226 of the Constitution. It was held that: