1984 (10) TMI 106 - AT - Wealth-tax

Summary

Issues:
1. Validity of the order of the CWT under section 25(2) of the WT Act.
2. Jurisdiction of the CWT to set aside assessments and direct redoing by the WTO.
3. Relevance of valuation dates and values determined by the Valuation Cell.

Analysis:
1. The appeals by the assessee were against the CWT's order setting aside the assessments for the years 1977-78 and 1978-79, directing the WTO to redo them. The CWT found a vast difference between the values of properties assessed and those fixed by the Valuation Cell as of 31st March, 1979. The CWT considered the original assessments erroneous and prejudicial to revenue, leading to the show cause notice and subsequent order.

2. The assessee's representative objected to the CWT's order, arguing on jurisdiction and merit grounds. The representative contended that the CWT improperly used values fixed by the Valuation Cell for invoking jurisdiction under section 25(2) of the WT Act. Reference was made to relevant case law supporting the objection. The departmental representative supported the CWT's order, emphasizing the disparity in values and the need for correct assessment by the WTO.

3. The ITAT found substantial force in the assessee's objections. It was highlighted that for an order to be considered erroneous under section 25(2) of the WT Act, it must be found to be legally incorrect, causing prejudice to revenue. The ITAT determined that the values fixed by the Valuation Cell after the original assessments were completed could not be considered relevant for the earlier valuation dates. The ITAT disagreed with the departmental representative's arguments and found the CWT's actions to be without jurisdiction, setting aside the assessments and restoring the original assessment orders for the two years. The appeals by the assessee were allowed based on these findings.