2020 (8) TMI 288 - AT - Wealth-tax

Validity of the assessment framed u/s 16(3) read with section 17 of WT Act - wealth tax officer was in possession of the information about the acquisition of 2 adjoining residential plots of urban land at Bopal which were subject to the wealth tax as per the provisions of section 2(ea) of the Act - assessee before us contended that the assessee has acquired membership in Bopal Shobhan Cooperative Housing Society Limited and not the lands as alleged by the authorities below - HELD THAT - On perusal of the orders of the authorities below, we find that it was alleged that the assessee has acquired 2 adjoining piece of lands and there was no mentioned whether such pieces of land was acquired in Bopal Shobhan Cooperative Housing Society Limited. Accordingly a query was posted to the learned AR for the assessee to justify whether the land in dispute is the same which were acquired in the Bopal Shobhan Co-operative Housing Society Limited through the membership. But the learned AR failed to substantiate the same based on the documentary evidence. Our apprehension is that there can be a possibility that the assessee has acquired other pieces of land other than the lands from such society. For this purpose, we have also perused the reason recorded for reopening the impugned assessment and found that there was also no reference made to the lands acquired from the society Matter needs to be re-examined at the level of the wealth tax officer in the light of the above stated discussion and as per the provisions of law. Both the learned AR and the DR did not raise any objection on remitting the matter back to the file of the wealth tax officer. Accordingly, at this stage, we do not find any reason to adjudicate the issue raised by the assessee on merit. Hence, the ground of appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
1. Validity of notice issued under section 17 and consequential order under section 16(3) r.w.s. 17 of the Wealth Tax Act, 1957.
2. Classification of residential plots as assets under section 2(ea) of the Wealth Tax Act, 1957.
3. Challenge to the validity of the assessment framed under section 16(3) read with section 17 of the Act.

Analysis:
1. The appeal raised concerns regarding the validity of the notice issued under section 17 and the subsequent order under section 16(3) r.w.s. 17 of the Wealth Tax Act, 1957. The appellant argued that the notice was issued without acquiring valid jurisdiction. The appellant challenged the assessment, contending that the residential plots held should not be considered as assets under section 2(ea) of the Act. The Wealth Tax Officer had information about the acquisition of residential plots by the assessee, leading to the issuance of a show cause notice. The appellant claimed that the construction on the land was ongoing and, therefore, not subject to wealth tax. However, the Assessing Officer disagreed, treating the investment in the lands as taxable wealth. The CIT (A) also rejected the appellant's contentions, leading to the appeal before the Tribunal.

2. The appellant further argued that the impugned land belonged to a cooperative housing society, and the membership acquired should not be considered part of the appellant's wealth. Despite presenting the balance sheet of the cooperative society, the authorities did not find sufficient evidence to support the appellant's claim. The Tribunal noted a lack of clarity regarding whether the lands acquired were from the society or other sources. As a result, the matter was remitted back to the wealth tax officer for re-examination, as both parties agreed. The Tribunal allowed the appellant's appeal on this ground for statistical purposes.

3. The Tribunal also addressed the delay in pronouncing the order due to exceptional circumstances, such as the Covid-19 pandemic and subsequent lockdown. Citing legal precedents and notifications, the Tribunal extended the time for pronouncing the order, considering the extraordinary disruptions in judicial proceedings. Despite the delay, the Tribunal proceeded to pronounce the order, allowing the appeal of the assessee and dismissing the appeal of the Assessing Officer. The order was pronounced beyond the usual 90-day period, in acknowledgment of the challenges posed by the prevailing circumstances.

In conclusion, the Tribunal's decision addressed the issues raised by the appellant regarding the validity of the notice, classification of assets, and delay in pronouncing the order, providing detailed reasoning and legal interpretations to support its conclusions.