1994 (5) TMI 7 - HC - Wealth-tax

Summary

Issues:
1. Constitutionality of section 16A of the Wealth-tax Act, 1957.
2. Validity of notices issued by the Assessing Officer and Valuation Officer.
3. Jurisdiction of the Assessing Officer to require submission of a return for the assessment year 1993-94.

Analysis:

1. Constitutionality of section 16A:
The petitioner, a Hindu undivided family, challenged the constitutionality of section 16A of the Wealth-tax Act, 1957, which allows the Assessing Officer to refer the valuation of assets to a Valuation Officer. The petitioner argued that the provision lacked norms to guide the Valuation Officer in assessing the market value. The court held that section 16A is not ultra vires the Constitution as the Valuation Officer is guided by the provisions of the Act and Schedule III rules for asset valuation. The court emphasized that the Valuation Officer must follow the prescribed rules, rejecting the challenge on the grounds of lack of guidance.

2. Validity of notices issued:
The Assessing Officer issued a notice (annexure 'A') requiring the petitioner to submit a return for the assessment year 1993-94, while the Valuation Officer issued annexure 'C' notice for valuation purposes. The petitioner contended that annexure 'C' notice was without jurisdiction due to the challenge against the constitutionality of section 16A. However, since the court upheld the constitutionality of section 16A, the challenge against annexure 'C' notice failed. The court found both notices to be within the jurisdiction of the respective officers, dismissing the challenge against annexure 'C' notice.

3. Jurisdiction to require submission of a return:
The petitioner argued that the Assessing Officer lacked jurisdiction to require submission of a return for the assessment year 1993-94, citing the exemption limit and previous assessments. The court clarified that under section 14 of the Act, individuals exceeding the exempted wealth limit must furnish a return. As the petitioner's assessment for 1992-93 was pending, the court held that filing a return would not cause prejudice. The court deemed the Assessing Officer's notice (annexure 'A') legal and within jurisdiction, dismissing the petitioner's justification for not filing the return.

In conclusion, the court dismissed the petition challenging the constitutionality of section 16A and upheld the validity of notices issued by the Assessing Officer and Valuation Officer. The court affirmed the jurisdiction of the Assessing Officer to require the submission of a return for the assessment year 1993-94, emphasizing compliance with the statutory provisions of the Wealth-tax Act.