NUSLI NEVILLE WADIA Vs. NILKANTHAN T L WTO

JUDGEMENT

(1.) THE petitioner is a wealth tax assessee and had filed WT returns for the asst. yrs. 1967 68 and 1968 69. The WTO, Bombay, completed the WT assessment for the asst. year 1967 68, by order dt. 18th March, 1968, and computed the total net wealth at Rs. 20,44,794. The assessment for the asst. year 1968 69 was completed by order dt. 22nd Aug., 1970, and the net wealth was found to be Rs. 22,22,007. On 29th March, 1976, the petitioner was served with a notice under S. 17 of the WT Act, 1957, issued by respondent No. 1, inter alia, claiming that there is reason to believe that the petitioner's net wealth chargeable to tax for the asst. year 1967 68 had escaped assessment. The petitioner was called upon to file a return within thirty five days of the receipt of notice. The petitioner received the notice for reopening the assessment for the asst. year 1968 69 on 31st March, 1977. The petitioner filed fresh returns for the relevant assessment years without prejudice to the contention that the WTO had no jurisdiction to reopen the assessment. The petitioner sought reasons from the WTO for reopening the assessment, but the same were not furnished and the petitioner was served with a notice to remain present for hearing before respondent No. 1. At the hearing on 26th Feb., 1980, the petitioner's authorised representative was orally informed that the reopening of the assessment was initiated because the WTO proposed to revalue the shares held by the petitioner in the company known as Neville Wadia (P) Ltd. The petitioner thereafter approached this Court by filing the present petition under art. 226 of the Constitution of India to challenge the validity of the notice.

(2.) MRS . S. Jagtiani, learned counsel appearing on behalf on the petitioner, submitted that the WTO had issued a notice to the mother of the petitioner for reopening her wealth tax assessment and one of the reasons furnished for reopening the assessment was that the shares held by the mother of the petitioner in the company known as Neville Wadia (P) Ltd. require to be revalued. The mother of the petitioner filed Misc. Petn. No. 1311 of 1973 in this Court under art. 226 of the Constitution of India and the petition was allowed and the notice for reopening the assessment was struck down by my judgment dt. 4th July, 1979. The learned counsel urged, and in my judgment correctly, that the assessment for the relevant assessment years was completed after the petitioner disclosed all the relevant information about the valuation of the shares, and the WTO accepted the said valuation. It was urged that the mere fact that subsequently the WTO is of the opinion that the shares were not properly valued is not sufficient to reopen the assessment. The respondents have not filed any return in answer to the petition, but Shri Joshi, learned counsel appearing for the Revenue, stated that the WTO initiated the proceedings on receipt of certain information that the shares were not properly valued. It is not permissible to exercise jurisdiction under S. 17 of the WT Act merely because the WTO changes his opinion about the method of valuation of shares. In my judgment, the proceedings commenced by the WTO under S. 17 of the Act were wholly misconceived and are required to be struck down.