ALI ASGHAR CEIZAR Vs. COMMISSIONER OF I T

JUDGEMENT

(1.) This writ petition is filed to have the order passed by the second respondent dated 06.01.2010 quashed, and to consequently declare that the wealth tax demand, relevant to the assessment years 1998-1999 to 2005-2006, be kept in abeyance till the outcome of O.S.No.32 of 1999 on the file of the IV Additional Metropolitan Sessions Judge, Hyderabad.

(2.) The petitioner claims to own an extent of Acs.2.30 guntas of land, in Municipal Plot No.10 at Banjara Hills, Hyderabad, which was purchased for him by his father Sri Mirza Hussain Ali Ceizar vide sale deed dated 18.05.1965 registered with the Office of the Sub-Registrar of Khairtabad, Hyderabad. The petitioner would allege that a conspiracy was hatched to knock away the property; the said property was sold to M/s.Nagarjuna Construction Company Limited; the second respondent initiated proceedings under the Wealth Tax Act, 1957, (hereinafter referred to as the "Act") for the assessment years 1998-1999 to 2005-2006; pursuant to the notice, he filed his return of wealth valuing the aforesaid property at Rs.NIL on the ground that the said property had been illegally sold away to M/s.Nagarjuna Construction Company Limited; and the wealth tax assessment was completed holding that, once the Court passes a decree in his favour, he would be the owner of the land and, keeping in view the limitation of time for completion of wealth tax assessment and as a matter of precaution, the petitioner was liable to pay wealth tax on the value of the aforesaid land. The second respondent, however, kept the demand of Rs.23,28,560/-, comprising of wealth tax of Rs.15,40,920/- and interest under Section 17B of the Act of Rs.7,87,640/-, in abeyance till a final decree was passed in the Civil Suit in O.S.No.32 of 1999; and, thereafter, issued the impugned proceedings dated 06.01.2010 stating that the stay, which was granted by the assessing officer till the disposal of O.S. No.32 of 1999, was being cancelled as the Commissioner of Income Tax (Wealth) (CIT(W)) had dismissed the appeals. Against the order of assessment, the petitioner had earlier preferred appeals to the CIT (W) and, on the said appeals being rejected, appeals were filed before the Income Tax Appellate Tribunal which are said to be still pending.

(3.) Sri M.M. Firdous, Counsel for the petitioner, would submit that in as much as the petitioner has not as yet been issued a demand notice, calling upon him to pay the wealth tax as assessed earlier, he cannot be treated as an assessee in default; the impugned order canceling the assessment order, in effect, treats the petitioner as an assessee in default; and the impugned order is without jurisdiction.