1987 (2) TMI 102 - AT - Wealth-tax

Summary

Issues:
1. Validity of the assessment under section 16(5) of the Wealth Tax Act for the assessment year 1971-72.
2. Validity of the notice served under section 17 on the legal heirs of the deceased assessee.
3. Assessment on the wealth of a deceased individual after the valuation date.
4. Justification of the valuation of the property taken over by the Government.

Analysis:

1. The appeal by the Revenue related to the assessment made for the assessment year 1971-72 under section 16(5) of the Wealth Tax Act. The assessment was completed ex-parte by the WTO based on the available materials on file.

2. The AAC, upon appeal by the assessee, canceled the assessment under section 16(5) citing various reasons, including the lack of clarity on the issuance and service of the notice under section 17 to the legal heirs. The AAC found discrepancies in the actions taken by the WTO and concluded that the assessment deserved to be canceled.

3. The Revenue appealed the AAC's decision, seeking restoration of the assessment order. The Tribunal noted that the notice under section 17 was served on an individual not mentioned as a legal heir in the assessment order. Additionally, it was established that the deceased had passed away before the valuation date, making the assessment on his wealth invalid.

4. The Tribunal emphasized that the assessment on the deceased individual's wealth as of the valuation date was not permissible due to his demise before that date. The Tribunal also highlighted that the valuation of the property taken over by the Government was not a crucial consideration given the overall invalidity of the assessment.

5. The Departmental Representative argued against considering the factor of the deceased's death prior to the valuation date as a ground for canceling the assessment. However, the Tribunal held that this fact, mentioned in the AAC's order, had legal consequences that could not be ignored, leading to the cancellation of the assessment.

6. The Tribunal did not delve into the valuation of the property under Government possession, stating that the assessment itself could not be sustained due to fundamental flaws. Therefore, the Tribunal upheld the cancellation of the Revenue's appeal, concluding that the assessment was invalid on multiple grounds.

This comprehensive analysis of the judgment highlights the key legal issues surrounding the assessment under the Wealth Tax Act for the specified assessment year and the subsequent appellate decisions that led to the cancellation of the assessment.