Section 16 - Assessment - Wealth Tax Act, 1957

1 [ Assessment. 16. 2 [(1) Where a return has been made under section 14 or section 15 or in response to a notice under clause (i) of sub-section (4), (i) if any tax or interest is found due on the basis of such return, after adjustment of any amount paid by way of tax or interest, then, without prejudice to the provisions of sub-section (2), an intimation shall be sent to the assessee specifying the sum so payable, and such intimation shall be deemed to be a notice of demand issued under section 30 and all the provisions of this Act shall apply accordingly; and (ii) if any refund is due on the basis of such return, it shall be granted to the assessee and an intimation to this effect shall be sent to the assessee : Provided that except as otherwise provided in this sub-section, the acknowledgement of the return shall be deemed to be an intimation under this sub-section where either no sum is payable by the assessee or no refund is due to him : Provided further that no intimation under this sub-section shall be sent after the expiry of two years from the end of the assessment year in which the net wealth was first assessable.] 3 [ (1A) [Omitted by the Finance Act, 1999, w.e.f. 1-6-1999.] 4 [ (1B) [ Omitted by the Finance Act, 1999, w.e.f. 1-6-1999. ] (2) 5 [Where a return has been made under section 14 or section 15, or in response to a notice under clause (i) of sub-section (4) of this section, the Assessing Officer shall, if he] consid ers it necessary or expedient to ensure that the assessee has not understated the net wealth or has not underpaid the tax in any manner, 6 [* * *] serve on the assessee a notice requiring him, on a date to be specified therein, either to attend at the office of the Assessing Officer or to produce, or cause to be produced there, any evidence on which the assessee may rely in support of the return : 7 [ Provided that no notice under this sub-section shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished.] (3) On the day specified in the notice issued under sub-section (2) or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assess ing Officer shall, by order in writing, assess the net wealth of the assessee and determine the sum payable by him on the basis of such assessment. (4) For the purposes of making an assessment under this Act, the Assessing Officer may serve, on any person who has made a return under section 14 or section 15 or in whose case the time allowed under sub-section (1) of section 14 for furnishing the return has expired, a notice requiring him, on a date to be specified there in, (i) where such person has not made a return 8 [within the time allowed under sub-section (1) of section 14] to furnish a return of his net wealth or the net wealth of any other person in respect of which he is assessable under this Act on the valuation date, in the prescribed form and verified in the prescribed manner, setting forth the particulars of such net wealth and such other particulars as may be prescribed, or (ii) to produce or cause to be produced such accounts, records or other documents as the Assessing Officer may require. (5) If any person, (a) fails to make the return required under sub-section (1) of section 14 and has not made a return or a revised return under section 15, or (b) fails to comply with all the terms of a notice issued under sub-section (2) or sub-section (4), the Assessing Officer, after taking into account, all relevant material which he has gathered, shall, after giving such person an opportunity of being heard, estimate the net wealth to the best of his judgment and determine the sum payable by the person on the basis of such assessment : Provided that such opportunity shall be given by the Assessing Officer by serving a notice calling upon the person to show cause, on a date and time to be specified in the notice, why the assessment should not be completed to the best of his judgment : Provided further that it shall not be necessary to give such opportunity in a case where a notice under sub-section (4) has been issued prior to the making of the assessment under this sub-section.] 9 [(6) Where a regular assessment under sub-section (3) or sub-section (5) is made, (a) any tax or interest paid by the assessee under sub-section (1) shall be deemed to have been paid towards such regu lar assessment ; (b) if no refund is due on regular assessment or the amount refunded under sub-section (1) exceeds the amount refundable on regular assessment, the whole or the excess amount so refunded shall be deemed to be tax payable by the assessee and the provi sions of this Act shall apply accordingly. (7) 10 [Omitted by the Finance Act, 1999, w.e.f. 1-6-1999.] 11 [***] --------------------------- Notes:- 1. Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Prior to its substitution, section 16, as amended by the Wealth-tax (Amendment) Act, 1964, w.e.f. 1-4-1965, stood as under : "16. Assessment. (1) If the Assessing Officer is satisfied without requiring the presence of the assessee or production by him of any evidence that a return made under section 14 or 15 is correct and complete, he shall assess the net wealth of the assessee and determine the amount of wealth-tax payable by him or the amount refundable to him on the basis of such return. (2) If the Assessing Officer is not so satisfied, he shall serve a notice on the assessee either to attend in person at his office on a date to be specified in the notice or to produce or cause to be produced on that date any evidence on which the assessee may rely in support of his return. (3) The Assessing Officer, after hearing such evidence as the person may produce and such other evidence as he may require on any specified points, and after taking into account all relevant material which the Assessing Officer has gathered, shall, by order in writing, assess the net wealth of the assessee and determine the amount of wealth-tax payable by him or the amount refundable to him on the basis of such assessment. (4) For the purpose of making an assessment under this Act, the Assessing Officer may serve, on any person who has made a return under sub-section (1) of section 14 or upon whom a notice has been served under sub-section (2) of that section, or who has made a return under section 15, a notice requiring him to produce or cause to be produced on a date specified in the notice such accounts, records or other documents as the Assessing Officer may require. (5) If any person fails to make a return in response to any notice under sub-section (2) of section 14, or fails to comply with the terms of any notice issued under sub-section (2) or sub-section (4), the Assessing Officer, after taking into account all relevant material which he has gathered, shall estimate the net wealth to the best of his judgment and determine the amount of wealth-tax payable by the person or the amount refundable to him on the basis of such assessment." 2. Substituted by the Finance Act, 1999, w.e.f. 1-6-1999. Prior to its substitution, sub-section (1), as amended by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989 and Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989, read as under : "(1)( a ) Where a return has been made under section 14 or section 15 or in response to a notice under clause ( i ) of sub-section (4), ( i ) if any tax or interest is found due on the basis of such return after adjustment of any amount paid by way of tax or interest, an intimation shall be sent to the assessee specifying the sum so payable, and such intimation shall be deemed to be a notice issued under section 30 and all the provisions of this Act shall apply accordingly ; and ( ii ) if any refund is due on the basis of such return, it shall be granted to the assessee : Provided that in computing the tax or interest payable by, or refundable to, the assessee, the following adjustments shall be made in the net wealth declared in the return, namely : ( i ) any arithmetical errors in the return, accounts or documents accompanying it, shall be rectified ; ( ii ) any exemption or deduction, which, on the basis of the information available in such return, accounts or documents, is prima facie admissible but which is not claimed or made in the return, shall be allowed ; ( iii ) any exemption or deduction claimed or made in the return, which, on the basis of the information available in such return, accounts or documents, is prima facie inadmissible, shall be disallowed : Provided further that where adjustments are made under the first proviso, an intimation shall be sent to the assessee, notwithstanding that no tax or interest is found due from him after making the said adjustments : Provided also that an intimation for any tax or interest due under this clause shall not be sent after the expiry of two years from the end of the assessment year in which the net wealth was first assessable. ( b ) Where as a result of an order made under sub-section (3) or sub-section (5) of this section or section 17 or section 23 or section 24 or section 25 or section 27 or section 29 or section 35 or any order of the Wealth-tax Settlement Commission under sub-section (4) of section 22D relating to any earlier assessment year and passed subsequent to the filing of the return referred to in clause ( a ), there is any variation in the exemption or deduction claimed or made in the return, and as a result of which, ( i ) if any tax or interest is found due, an intimation shall be sent to the assessee specifying the sum so payable, and such intimation shall be deemed to be a notice of demand issued under section 30 and all the provisions of this Act shall apply accordingly, and ( ii ) if any refund is due, it shall be granted to the assessee : Provided that an intimation for any tax or interest due under this clause shall not be sent after the expiry of four years from the end of the financial year in which any such order was passed." 3. Before omission, sub-section (1A), as inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989 and later on amended by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989, read as under : '(1A) ( a ) Where in the case of any person, the net wealth, as a result of the adjustments made under the first proviso to clause ( a ) of sub-section (1), exceeds the net wealth declared in the return by any amount, the Assessing Officer shall, ( i ) further increase the amount of tax payable under sub-section (1) by an additional wealth-tax calculated at the rate of twenty per cent of the tax payable on such excess amount and specify the additional wealth-tax in the intimation to be sent under sub-clause ( i ) of clause ( a ) of sub-section (1) ; ( ii ) where any refund is due under sub-section (1), reduce the amount of such refund by an amount equivalent to the additional wealth-tax calculated under sub-clause ( i ). ( b ) Where as a result of an order under section 23 or section 24 or section 25 or section 27 or section 29 or section 35, the amount on which additional wealth-tax is payable under clause ( a ) has been increased or reduced, as the case may be, the additional wealth-tax shall be increased or reduced accordingly, and, ( i ) in a case where the additional wealth-tax is increased, the Assessing Officer shall serve on the assessee a notice of demand under section 30 ; ( ii ) in a case where additional wealth-tax is reduced, the excess amount paid, if any, shall be refunded. Explanation . For the purposes of this sub-section, "tax payable on such excess amount" means the difference between the tax on the net wealth and the tax that would have been chargeable had such net wealth been reduced by the amount of adjustments.' 4. Before omission, sub-section (1B), as inserted by the Finance Act, 1990, w.r.e.f. 1-4-1989, read as under: "(1B) Where an assessee furnishes a revised return under section 15 after the issue of an intimation, or the grant of refund, if any, under sub-section (1) of this section, the provisions of sub-sections (1) and (1A) of this section shall apply in relation to such revised return and ( i ) the intimation already sent for any wealth-tax, additional wealth-tax or interest shall be amended on the basis of the said revised return and where any amount payable by way of wealth-tax, additional wealth-tax or interest specified in the said intimation has already been paid by the assessee then, if any such amendment has the effect of ( a ) enhancing the amount already paid, the intimation amended under this clause shall be sent to the assessee specifying the excess amount payable by him and such intimation shall be deemed to be a notice of demand issued under section 30 and all the provisions of this Act shall apply accordingly ; ( b ) reducing the amount already paid, the excess amount paid shall be refunded to the assessee ; ( ii ) the amount of the refund already granted shall be enhanced or reduced on the basis of the said revised return and where the amount of refund already granted is ( a ) enhanced, only the excess amount of refund due to the assessee shall be paid to him ; ( b ) reduced, the excess amount so refunded shall be deemed to be the tax payable by the assessee and an intimation shall be sent to the assessee specifying the amount so payable, and such intimation shall be deemed to be a notice of demand issued under section 30 and all the provisions of this Act shall apply accordingly : Provided that an assessee, who has furnished a revised return under section 15 after the service upon him of the intimation under sub-section (1) of this section, shall be liable to pay additional wealth-tax in relation to the adjustments made under the first proviso to clause ( a ) of sub-section (1) and specified in the said intimation, whether or not he has made the said adjustments in the revised return." 5. Substituted for "In a case referred to in sub-section (1), if the Assessing Officer" by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989. 6. Omitted by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989., before it was read as:- "he shall" 7. Substituted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991. Before it was read as;- proviso read as under : " Provided that no notice under this sub-section shall be served on the assessee after the expiry of the financial year in which the return is furnished or the expiry of six months from the end of the month in which the return is furnished, whichever is later." 8. Substituted Vide the Finance Act, 1990, w.e.f. 1-4-1990., before it was read as:- "before the end of the relevant assessment year" 9. Inserted vide the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989. 10. Before omission, sub-section (7), as inserted by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989, read as under : "(7) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions for the time being in force and applicable to the relevant assessment year." 11. Explanation omitted by the Finance Act, 1999, w.e.f. 1-6-1999. Prior to its omission, Explanation , as inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991, read as under: "Explanation. An intimation sent to the assessee under sub-section (1) or sub-section (1B) shall be deemed to be an order for the purposes of sub-section (1) of section 25."