1993 (3) TMI 138 - AT - Wealth-tax

Amnesty Scheme, Assessing Officer, Held By Assessee, Orders Prejudicial To Interests, Original Assessment

Summary

Issues:
1. Whether the action of the Income-tax Commissioner (ITC) under section 25(2) of the Wealth-tax Act to revise assessments based on the valuation of shares held by the assessee was valid.
2. Whether the ITC had the jurisdiction to set aside assessments and direct the Assessing Officer to adopt higher values of shares of Tingapani Tea Co. Ltd.
3. Whether the ITC's action under section 25(2) was within the prescribed limitation period.
4. Whether the ITC's action was in line with the Amnesty Scheme announced by the CBDT and Circular No. 451, dated 17-2-1986.

Analysis:
The judgment pertains to the appeals filed by the assessee challenging the ITC's order dated 25-9-1991 under section 25(2) of the Wealth-tax Act for the assessment years 1982-83 to 1985-86. The ITC had issued a notice proposing to revise the assessments based on the valuation of shares held by the assessee in various companies. The assessee contended that the ITC's action was barred by limitation as the valuation of shares had been concluded in earlier orders. The ITC held that its action was within the prescribed period as the operative orders were made later. The assessee argued that the ITC's action was against the spirit of the Amnesty Scheme announced by the CBDT, which prohibited enquiring into assets whose values had been accepted in earlier assessments. The ITC set aside the assessments and directed the Assessing Officer to adopt higher values of shares, leading to the appeals.

Upon careful consideration, the tribunal allowed the assessee's appeals. It noted that the valuation of shares had become final in earlier assessments, and the orders passed later were only to assess undisclosed wealth under the Amnesty Scheme. Referring to Circular No. 451, the tribunal highlighted that the CBDT had restricted inquiries to suppressed or under-valued assets, not those already accepted. The tribunal emphasized that the ITC's action under section 25(2) was beyond the limitation period and lacked jurisdiction to revise the assessments regarding share values. It held that the ITC's actions were illegal and unsustainable, quashing the impugned order and allowing all four appeals of the assessee. The tribunal's decision was supported by the precedent set by the Calcutta High Court in a similar case. The tribunal found the case laws relied upon by the ITC to be distinguishable and concluded in favor of the assessee based on the prescribed limitations and the CBDT's directives under the Amnesty Scheme.