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TMI Blog1982 (4) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... 66-67, an assessment was made to wealth-tax in the status of an individual on 23-7-1975. The WTO did not accept the contention that the trust was a public religious one. He held that it was a private religious trust and, thereafter, in his order, observed as under : " I treat the assessee as a private religious trust and assess it as 'individual' under section 21(4) of the WT Act as the interest of the beneficiaries (i.e., family deities and members of the family of the authors of the trust) in the corpus and income of the trust is indeterminate. " The wealth assessed was Rs. 3,24,567 and the rate applicable thereto taking it as net wealth was applied. 4. It would appear that sometimes later, the audit had scrutinised the wealth-tax assessment for the year 1966-67 to which we have referred and which was made in the status of an individual, and audit gave a note dated 5-10-1977 which is applicable to this year as well as for the subsequent years up to 1975-76 and the relevant portion of which reads as under : " ii. As per section 21(4) where the trust is treated and assessed as the assets belonging to an individual, the rates applicable are the rates as per Part I of the Sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the WTO had initially invoked the provisions of section 21(4) and by this communication the IAC wrote stating that one copy of the Board's Letter F. No. 236/710/1978A and PAC I dated 16-3-1979 was enclosed and that as stated therein the WTO should take immediate steps for reopening the assessments. The WTO, in his order-sheet entry dated 27-3-1979, referred to the receipt of this memo from the IAC (Audit) dated 26-3-1979 and mentioned that notice under section 17(1)(b) had already been issued (in fact the notice was served on 23-2-1979). There was no separate entry in the order-sheet or anywhere else as far as the wealth-tax proceedings were concerned about the reasons for initiating action under section 17. 6. In due course, the assessments came to be made under the provisions of section 16(5) of the Act inasmuch as the assessee did not file returns in response to the notice under section 17, though the advocate on behalf of the assessee did appear before the WTO. The WTO completed the assessments by levying wealth-tax at 1 1/2 per cent. 7. The assessee appealed to the AAC who considered the WT appeals together with the IT appeals to which we will refer later (in that he pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y's case because there was no question of the audit note being an expression of any opinion. The audit note merely pointed to a mistake apparent from the records. 10. The learned counsel for the assessee, on the other hand, submitted that there was no reference to the assessment order for the year 1966-67 and, therefore, whatever may have been said in the year 1966-67 had no applicability as far as these two assessment years were concerned. As far as the assessment year 1974-75 was concerned, it was stated, that reference to the assessment order for 1966-67 should be construed as referring only to the finding that the assessee was not a public religious trust. He stated that it could not be construed as a reference to the finding that the shares of the beneficiaries were not determinate. In fact, he stated there were only two deities who were the beneficiaries and it was settled law that in such a case the shares would be equal. 11. We have set out the facts in some detail since the question of assumption of jurisdiction to be re-opened by the WTO is in issue. From the chronological events we have set out, it is clear that there was no recording of reasons by the WTO for reopen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the IAC (Audit) and that also pending decision on the audit objection. It was not even the belief of the IAC (Audit). We do not deal, as far as these appeals are concerned, with the instructions of the Board communicated under the IAC (Audit)'s letter dated 26-3-1979 because these instructions were issued subsequent to the re-opening of the wealth-tax assessments. This is a case, where the WTO did not have any belief that the provisions of section 17 became applicable consequent to the assessment at too low a rate, etc. It is open to an appellate body to see whether the WTO had any belief or not for authority for this proposition---see, S. Narayanappa's case--and once we come to the finding that the WTO did not entertain any belief, it would follow that the reopening of the assessments was without jurisdiction. We would, for the aforesaid reasons, uphold the finding of the AAC quashing the reassessments as made though for slightly different reasons. The appeals of the department insofar as they relate to the wealth-tax matters, i.e. [WT Appeal Nos. 426 to 428 (Hyd.) of 1981] are accordingly dismissed. 12. As far as the IT appeals are concerned, there are two specific factors wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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