1988 (10) TMI 81 - AT - Wealth-tax

Summary

Issues Involved:

1. Whether the assessments for the assessment years 1976-77 to 1979-80 were barred by limitation.
2. Validity of returns filed by the assessee on 30th Nov., 1984.
3. Interpretation of Sections 14, 15, 17, and 17A of the Wealth Tax Act, 1957.

Detailed Analysis:

1. Whether the assessments for the assessment years 1976-77 to 1979-80 were barred by limitation:

The assessee contended that the assessments were barred by limitation and therefore illegal and void ab initio. The returns of wealth were filed on 30th Nov., 1984, and notices under Section 17 of the Wealth Tax (WT) Act were served on 11th Dec., 1984. The contention was that the assessments should have been completed within one year from the date of filing of the returns as per Section 17A(1)(b). However, the assessments were completed on 25th March, 1987, which was beyond the prescribed time limit. The CIT (A) held that the returns filed on 30th Nov., 1984, were invalid as they were not filed under Section 14, and the notices under Section 17 were referable only to Section 17(1)(a). The Tribunal upheld the assessee's contention, stating that the returns filed on 30th Nov., 1984, were valid and the assessments were barred by limitation as they were not completed within one year from the date of filing the returns.

2. Validity of returns filed by the assessee on 30th Nov., 1984:

The Tribunal analyzed Sections 14 and 15 of the WT Act, which deal with the return of wealth. Section 14(1) requires every person liable to wealth-tax to furnish the return before the 30th day of June of the corresponding assessment year. Section 15 allows a person to furnish a return or revised return at any time before the assessment is made. The Tribunal noted that there is no time limit prescribed for the submission of the return of wealth under Section 15, unlike Section 139(4) of the Income Tax Act, 1961, which has a specified time limit. Therefore, the Tribunal held that the returns filed by the assessee on 30th Nov., 1984, were valid in law and should be treated as voluntary returns.

3. Interpretation of Sections 14, 15, 17, and 17A of the Wealth Tax Act, 1957:

The Tribunal discussed the provisions of Sections 14, 15, 17, and 17A of the WT Act. Section 17A(1)(b) prescribes the time limit for the completion of assessment or reassessment. The Tribunal held that the insertion of Section 17A w.e.f. 1st Jan., 1976, did not alter the position that a person can furnish a return of wealth at any time before the assessment is made. The Tribunal rejected the Revenue's argument that the time limit for submitting the return should be limited to the period of four years from the end of the assessment year in which the wealth was first assessable. The Tribunal held that the legislature did not intend to set a time limit for furnishing returns voluntarily under Section 15, as evident from the absence of such a provision in the WT Act. The Tribunal concluded that the returns filed by the assessee were valid, and the assessments were barred by limitation as they were not completed within the prescribed time limit.

Conclusion:

The Tribunal allowed the appeals, holding that the returns filed by the assessee on 30th Nov., 1984, were valid and the assessments for the assessment years 1976-77 to 1979-80 were barred by limitation as they were not completed within one year from the date of filing the returns. The Tribunal refrained from expressing any view on the alternative argument that the notices under Section 17 should be construed as issued under Section 17(1)(b) and not under Section 17(1)(a).