1999 (1) TMI 28 - HC - Wealth-tax

Summary

Issues:
1. Jurisdiction of the Wealth-tax Officer to issue notice for assessment year 1987-88 under section 17 of the Wealth-tax Act, 1957.

Analysis:
The judgment pertains to a petition under article 226/227 of the Constitution of India seeking to quash a notice dated March 24, 1998, issued by the Wealth-tax Officer to the petitioner-assessee for the assessment year 1987-88 under section 17 of the Wealth-tax Act, 1957. The petitioner had not filed the wealth return for the said assessment year, and the notice was issued as wealth chargeable to wealth-tax for that year had escaped assessment. The key contention raised by the petitioner's counsel was that the notice was unauthorized and lacked jurisdiction as only a Deputy Commissioner was competent to issue such a notice as per section 17(1B) of the Act.

The court examined sub-section (1B) of section 17, which outlines the procedure for issuing notices for wealth escaping assessment. It was noted that as per clause (b) of sub-section (1B), a notice could only be issued by an Assessing Officer below the rank of Deputy Commissioner after four years from the end of the relevant assessment year, subject to the satisfaction of the Deputy Commissioner. If the Assessing Officer was of the rank of Deputy Commissioner or above, they could issue the notice based on their own satisfaction.

The court emphasized that in the present case, since the petitioner had not been assessed for the assessment year 1987-88 earlier, clause (b) of sub-section (1B) was applicable. The crucial aspect was whether the Assessing Officer had sought satisfaction from the Deputy Commissioner before issuing the notice. The respondent-Department contended that there was no bar for an Assessing Officer below the rank of Deputy Commissioner to issue the notice, provided they obtained satisfaction from the Deputy Commissioner on the reasons for issuing the notice.

Ultimately, the court held that the objection raised regarding the jurisdiction of the Wealth-tax Officer to issue the notice would not hold if the Officer had indeed obtained satisfaction from the Deputy Commissioner before issuing the notice. The court directed the petitioner to file a reply to the notice within four weeks and raise all objections available in law. Consequently, the writ petition was found to be devoid of merit and was dismissed.

In conclusion, the judgment clarified the jurisdictional requirements for issuing notices for wealth escaping assessment under the Wealth-tax Act, emphasizing the need for compliance with the prescribed procedures and obtaining necessary approvals as per the statutory provisions to ensure the validity of such notices.