1985 (10) TMI 25 - HC - Wealth-tax

Summary

Issues involved:
The judgment involves applications u/s 27(3) of the Wealth-tax Act, 1957 concerning assessment years 1970-71 to 1977-78, a dispute over Hindu undivided family properties between two cousin brothers, issuance of notices u/s 17 of the Act, assessments on the bigger Hindu undivided family, and the legality of the Tribunal's decision.

Assessment Proceedings and Dispute Over Properties:
The judgment pertains to applications u/s 27(3) of the Wealth-tax Act, 1957 concerning assessment years 1970-71 to 1977-78. It involves a dispute between two cousin brothers, Jagdish Puri and Shankar Puri, over the distribution of Hindu undivided family properties inherited from a common ancestor. A suit for partition was filed, resulting in Jagdish Puri being appointed as the receiver of all 13 properties of the bigger Hindu undivided family. The Wealth-tax Officer issued notices u/s 17 of the Act for the assessment years to bring the properties to tax, leading to assessments on the bigger Hindu undivided family.

Legal Justification of Tribunal's Decision:
An appeal was filed before the Tribunal, which dismissed the appeal. An application u/s 27(1) was filed to refer a legal question to the High Court, which the Tribunal declined. The Commissioner filed applications u/s 27(3) stating that the Tribunal's decision raised a question of law. The High Court heard arguments from both sides and examined the reasoning behind the assessments and notices issued by the Wealth-tax Officer.

Reasoning and Conclusion:
The Appellate Assistant Commissioner observed that the assessment proceedings were initiated against the smaller Hindu undivided family, and if the Wealth-tax Officer believed that the wealth assessable in the hands of the bigger Hindu undivided family had escaped assessment, fresh notices should have been issued. The Tribunal concurred with this view, considering the circumstances of the case and the reasons recorded by the Wealth-tax Officer. The High Court upheld the Tribunal's decision, stating that in the absence of any controversy about the facts, the assessments on the bigger Hindu undivided family were justified despite notices being issued to the smaller Hindu undivided family.

Final Decision:
The High Court found that the applications u/s 27(3) were without merit and dismissed them accordingly, affirming the correctness of the Tribunal's decision in the matter.