BHAGWANDAS JAIN Vs. DEPUTY COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THE petitioners in the above writ petitions are partners in the firm, Bhagwandas Shobhalal Jain, Sagar, and have challenged the notices issued to them under Section 17 of the Wealth-tax Act, 1957, on similar facts and grounds. All these petitions are, therefore, being disposed of by this common order.

(2.) THE petitioners in M. P. No. 2637 of 1988 and M. P. No. 2671 of 1988 were assessed to wealth-tax for the assessment years 1979-80, 1980-81 and 1981-82, in respect of their share of property in the firm. THE assessment was made by the Inspecting Assistant Commissioner of Wealth-tax (Assessment) (presently designated as Deputy Commissioner of Wealth-tax (Assessment)), and certain additions in the valuation of the assets were made and assessment orders annexures A, A-1 and A-2 were passed. Against the said additions, the petitioners had filed appeals before the Commissioner of Wealth-tax (Appeals), Jabalpur, who confirmed the additions by orders annexures B, B-l and B-2. However, on further appeal being filed before the Income-tax Appellate Tribunal, Jabalpur, against the orders of the first appellate authority, the additions made by the Inspecting Assistant Commissioner of Wealth-tax (Assessment) were deleted vide orders annexures C and C-l. After the assessments had thus attained finality in the year 1984, notices/dated February 19, 1988, were issued by the Inspecting Assistant Commissioner of Income-tax (Assessment), Jabalpur, under the provisions of Section 17 of the Wealth-tax Act, 1957, which the petitioners have challenged in these petitions as illegal an'd without jurisdiction. THE petitioners have (filed copies of notices as annexures D, D-l and D-2.

(3.) IN so far as the petitioners in M. P. No. 2637 of 1988 and M. P. No. 2671 of 1988 are concerned, since a pure question of law and jurisdiction is involved, the petitioners cannot be left to seek remedy provided under the Act and in any case, not at this distance of time in relation to the petitions which were filed long back in the year 1988. The assessment years for which the petitioners in these two petitions were assessed to wealth-tax under the Act were 1979-80, 1980-81 and 1981-82. Learned counsel for the petitioner has referred to the provisions of Section 17 of the Act as it stood during the relevant period and has pointed out that it is not a case where there has been any omission or failure on the part of the petitioners to make a return of their net wealth for the assessment years in question or to disclose fully and truly all material facts necessary for the assessment of the net wealth that the impugned notices under the said provision have been issued, but the respondents have relied upon a report of the Valuation Officer to whom, it appears, reference was made after the assessments had already been closed, to assess the fair market value and on the basis of the report obtained when no assessment was pending, the notices have been issued. Learned counsel submits that such a reference under the provisions of Section 16A could not have been made as after the assessment had been closed, there was no occasion for the respondents to make any assessment and to seek such report from the Valuation Officer. Learned counsel for the Revenue has, however, referred to the provisions of Section 2(cb) and contended that since assessment includes reassessment, such a report can be called even during reassessment, with the result, the report of the Valuation Officer can furnish valid foundation for reopening" the assessment in case it is found on that basis that the wealth chargeable to tax had escaped assessment by reason of underassessment or assessment at too low a rate or otherwise as provided in Section 17(1)(b).