COMMISSIONER OF WEALTH TAX Vs. JAGDISH PURI

JUDGEMENT

(1.) THESE eight applications under Section 27(3) of the Wealth-tax Act, 1957 (for short "the Act"), relate to the assessment years 1970-71, 1971-72, 1972-73, 1973-74, 1974-75, 1975-76, 1976-77 and 1977-78.

(2.) JAGDISH Puri and Shankar Puri are two cousin brothers. Their fathers hailed from a common ancestor who expired leaving behind 13 immovable properties of the Hindu undivided family. There was a dispute between JAGDISH Puri and Shankar Puri regarding distribution of Hindu undivided family properties. A suit for partition of the immovable properties was filed in the court of the Additional District Judge No. 2, Jodhpur, who by his judgment dated October 4,1973, held that half of the entire properties belonged to JAGDISH Puri and the other half to Shanker Puri. It may be stated that JAGDISH Puri was appointed as receiver of all the 13 properties of the bigger Hindu undivided family vis-a-vis the properties coming to his share as per the judgment of the Additional District Judge. The judgment passed by the Additional District Judge on October 4, 1973, was assailed in the High Court, The Wealth-tax Officer issued notices under Section 17 of the Act for the assessment years 1970-71 to 1974-75 to bring the properties to tax under the Act. The assessments were completed for the aforesaid years on the bigger Hindu undivided family and wealth-tax was levied on the value of all the 13 properties of the Hindu undivided family. An appeal was filed by the assessee before the Appellate Assistant Commissioner. The assessments were quashed by the Appellate Assistant Commissioner for the reason that the notices under Section 17 of the Act which were issued to JAGDISH Puri Hindu undivided family were for the smaller Hindu undivided family and that those notices did not pertain to the bigger Hindu undivided family and since the Wealth-tax Officer had completed the reassessment on the bigger Hindu undivided family relying on the reasons given in CWT v. Ridhkaran [1972] 84 ITR 705 (Raj.) he agreed with the contentions raised on behalf of the assessee.

(3.) THE Tribunal agreed with the conclusion arrived at by the Appellate Assistant Commissioner and in that connection referred to the report of the Inspector, submitted to the Wealth-tax Officer on the basis of which, the Wealth-tax Officer ordered that the notices be issued only to Jagdish Puri who had a half share. Under Section 17 of the Act, before issuing notice, the Wealth-tax Officer has to record reasons. It is not in dispute that the proceedings for reopening of the assessment were initiated on the basis of the report dated July 7, 1976, of the Inspector. We may usefully excerpt the following portion from the report which finds mention in the order of the Appellate Assistant Commissioner as well as in the order of the Tribunal :