1984 (3) TMI 4 - HC - Wealth-tax

Summary

Issues:
1. Whether the Tribunal should refer specific questions to the Income-tax Appellate Tribunal regarding assessment years 1965-66, 1966-67, 1967-68, and 1968-69.
2. Whether the lands in question were agricultural or non-agricultural during the relevant assessment years.
3. Whether the reassessments made by the Wealth-tax Officer were valid under section 17 of the Wealth-tax Act.

Analysis:
The Revenue sought directions to refer questions to the Tribunal regarding the applicability of section 17(1)(b) of the Wealth-tax Act for assessment years 1965-66 to 1967-68 and the status of the lands in question. The late C. Seshachalam Chetty, the assessee, had claimed the lands as agricultural, which was accepted in previous years. However, an audit report suggested otherwise, leading to reassessments under section 17 for the years 1965-66 to 1968-69. The Commissioner of Wealth-tax (Appeals) set aside reassessments for 1965-66 to 1967-68 due to time limitations but upheld the reassessment for 1968-69. The Tribunal concurred with the Commissioner's decision.

The Revenue argued that each assessment year is independent, and the assessee should have disclosed the lands annually. However, the definition of "assets" in the Wealth-tax Act allows for optional inclusion of exempted items like agricultural lands. The Tribunal agreed that the reassessments could only be treated as under section 17(1)(b), not 17(1)(a), as the assessee was not obligated to disclose agricultural lands. Reassessments for 1965-66 to 1967-68 were time-barred under 17(1)(b), rendering further inquiries unnecessary.

For the year 1968-69, the Tribunal directed a reference on whether there was sufficient material for the reassessment and the status of the lands. The assessee argued against the validity of the reassessment, claiming lack of proper verification. However, the Court deferred detailed scrutiny to a later stage. Ultimately, a reference was ordered for questions related to the assessment year 1968-69, while the petitions for the earlier years were dismissed.