1980 (9) TMI 23 - HC - Wealth-tax

Summary

Issues involved: Validity of reference made by Wealth-tax Officer to Valuation Officer u/s 16A of the Wealth Tax Act, 1957 for assessment year 1975-76.

The judgment addressed the issue of whether a valid reference can be made to the Valuation Officer by the Wealth-tax Officer if the assessee's assessment for the year in question is not pending at the time when the reference is made. The petitioner contended that the reference made by the Wealth-tax Officer was premature as the petitioner had not filed its return for the assessment year 1975-76, and no notice was served to file the return before the reference was made to the Valuation Officer. The respondents argued that the reference was made under the provisions of s. 16A(1)(b)(ii) of the Act, which did not require the assessment to be pending at the time of reference.

The court analyzed the relevant provisions of s. 16A of the Wealth Tax Act, which empower the Wealth-tax Officer to refer the valuation of any asset to a Valuation Officer for the purpose of making an assessment. It was observed that the jurisdiction to make a reference to a Valuation Officer is conferred on the Wealth-tax Officer "for the purpose of making an assessment." Since the assessment of the petitioner for the year 1975-76 was not pending before the Wealth-tax Officer when the reference was made, the court held that the Wealth-tax Officer had no jurisdiction to make the reference. Consequently, the reference and subsequent proceedings before the Valuation Officer were deemed to be without jurisdiction and were quashed.

The court refrained from expressing any opinion on whether the valuation made by the Valuation Officer was in accordance with the law and principles of natural justice. It was clarified that the Wealth-tax Officer could make a fresh reference to the Valuation Officer in accordance with the law for the purpose of assessing the petitioner for the assessment year 1975-76. As a result, the petition was allowed with costs, and the order of reference, subsequent proceedings before the Valuation Officer, and the order passed by the Valuation Officer were all quashed. The petitioner was entitled to the refund of the outstanding security deposit.