1982 (6) TMI 84 - AT - Wealth-tax

Issues Involved:

1. Validity of proceedings initiated under Section 17(1)(b) of the Wealth-tax Act, 1957.
2. Reopening of assessments based on the valuation report of the District Valuation Officer (DVO).
3. Acceptance of the valuation of the property by the Appellate Assistant Commissioner (AAC).
4. Opportunity of hearing to the Valuation Officer.
5. Speaking order by the AAC.

Detailed Analysis:

1. Validity of Proceedings Initiated under Section 17(1)(b):

The department challenged the AAC's finding that proceedings under Section 17(1)(b) were not validly initiated. The assessee, a co-owner of a property, had filed returns of wealth for the assessment years 1973-74 to 1976-77, which were accepted by the Wealth Tax Officer (WTO) without much discussion. The WTO later received a valuation report indicating a higher value for the property, leading to the issuance of notices under Section 17(1)(b) for the said years. The AAC quashed these proceedings, stating they were based on a mere change of opinion, referencing decisions like CIT vs. T.R. Rajakumari and CIT vs. Narinder Nath Parveen Chand.

2. Reopening of Assessments Based on the Valuation Report of the DVO:

The department argued that the information received from the DVO constituted "information" from an external source, justifying the reopening of assessments. The AAC's decision was contested on the grounds that the DVO's report was a valid basis for reopening, citing cases like S.B. (House & Land) Pvt. Ltd. vs. CIT and Ganga Properties vs. ITO. The Tribunal agreed with the department for the assessment years 1973-74 and 1974-75, stating that the DVO's report was valid information for reopening. However, for the assessment year 1975-76, the reopening was quashed as it amounted to a mere change of opinion based on the same material previously considered.

3. Acceptance of the Valuation of the Property by the AAC:

The department contended that the AAC's acceptance of the assessee's valuation without considering the DVO's report was erroneous. The Tribunal noted that the AAC's order was not a speaking one and lacked detailed reasoning. The Tribunal directed the AAC to recompute the value of the property considering the provisions of Rule 1BB of the Wealth-tax Rules, 1957.

4. Opportunity of Hearing to the Valuation Officer:

The department argued that the AAC should have given an opportunity of hearing to the DVO before setting aside the valuation. The Tribunal rejected this contention, stating that the report was not obtained under Section 16A in the assessee's case, and thus, the AAC was not obliged to give a hearing to the DVO. The Tribunal emphasized that the special procedure under Section 23(3A) could not be invoked unless the reference was made in the assessee's own case.

5. Speaking Order by the AAC:

The department criticized the AAC's order for not being a speaking one. The Tribunal agreed that the AAC's order lacked detailed reasoning and merely accepted the assessee's contentions without providing substantive reasons. The Tribunal set aside the AAC's order and directed a fresh determination of the property's value in accordance with Rule 1BB.

Conclusion:

The Tribunal allowed the department's appeals for the assessment years 1973-74 and 1974-75, upholding the reopening of assessments based on the DVO's report. The appeals for the assessment years 1975-76 and 1976-77 were dismissed, quashing the reopening as it amounted to a mere change of opinion. The Tribunal also directed the AAC to recompute the property's value considering Rule 1BB, ensuring a detailed and reasoned order.

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