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TMI Blog2008 (2) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... .8.1997 being issued under Section 17, the assessee had filed return of wealth on 14.10.1997. The assessment had to be completed within two years from the end of financial year in which notice was issued which in the instant case would be 31.3.2000. The Assessing Officer issued notice under Section 16 (2) on 24.9.1999 which is after the expiry of one year from filing of the return. The assessment notice under section 16(3) read with section 17 was issued on 29.3.2000. It is therefore, submitted that considering the terminology of section 17, there is no requirement that notice under section 16(2) has to be served to proceed with the assessment as the assessment under section 17 is independent. It is therefore, submitted that the impugned order of the tribunal be set aside. 3. On the other hand, on behalf of the appellant, the learned counsel submitted that a perusal of section 17 of the Wealth Tax Act makes it clear, that other provisions of the Act shall so far as may be apply, as if the return was filed under section 14. It is therefore, submitted that the return filed pursuant to proceedings under Section 17 of the W.T. Act has to be treated as return under section 14 and as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary. It was argued that the assessment or reassessment was not under section 147 but under sections 143/147. The argument of the assessee was rejected. The Supreme Court noted that the submission of Assessee cannot be accepted because the language of section 148 cannot be ignored. Section 144(B) the court held is a procedural provision. It fits into the procedural scheme and, therefore, it cannot be excluded by reason of the use of the words "so far as may be" Nor was there any other good reason to exclude it from the procedure to be followed subsequent to notice u/s. 148. The court then observed as under : "As to the argument based upon sections 144A, 246 and 263 we do not doubt that assessments under section 143 and assessments and re-assessments under section 147 are different, but in making assessments and re-assessments under section 147 the procedure laid down in section subsequent to section 139 including that laid down by section 144B, has to be followed." 5. Considering this judgment, the tribunal held that section 16 is applicable to reassessment under section 17 which goes without saying that the requirement of giving notice under the proviso to sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese words "as far as may be" mean thereby that section 17 is the assessing section and for that purpose the provisions of section 14 to 16 to the extent they are applicable only would apply. In other words does section 17 confer power on the Assessing Officer in case where section 17 is invoked to independently make an order of assessment in a case where a return is filed under Section 14 after notice and after the period of twelve months have expired from the date of filing the return. 9. Section 16(2) reads as under : "Where a return has been made under section 14 or section 15, or in response to a notice under clause (i) of sub section (4) of this section the Assessing Officer shall, if he considers it necessary or expedient to ensure that the assessee has not understated the net wealth or has not underpaid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend at the office of the Assessing Officer or to produce, or cause to be produced there, any evidence on which the assessee may rely in support of the return. Provided that no notice under this sub-section shall be served on the assessee after the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial year in which the notice under sub section (1) of Section 17 was served. 14. Section 17 can be invoked when the Assessing Officer has reason to believe that the net wealth chargeable to tax in respect of an assessee has escaped assessment for any assessment year for the reasons set out therein. The A.O. may serve on such person a notice. If on the notice being served the assessee fails to file a return, there is no independent provision in section 17 to make a best judgment assessment like in section 16(5). The language used in fact is that the A.O. may proceed to assess or reassess such net wealth. If the argument of the Revenue has to be accepted, it must mean that once Section 17 has been invoked and the notice served on the assessee and the assessee either does not furnish the return in the prescribed form, then the A.O. is empowered to proceed to assess or reassess such net wealth and also any other net wealth chargeable to tax in respect of which such person is assessable irrespective of the requirement of Section 16(2), under Section 17 itself. This submission if accepted must lead to the conclusion that section 17 is a self contained code for assessment of wealth tax w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) is in the nature of an embargo on the Assessing Officer, if the period has expired not to issue notice after that period. In other words, the Assessing Officer is bound to accept the return as filed. Though the notice under Section 16(2) may be procedural, the proviso is not merely procedural but is in the nature of a limitation on the power of the Assessing Officer not to proceed further in a case where return has been filed under section 14 or under section 15. That will have to read as applicable to a case of re-assessment under Section 17. 18. Let us now examine Sections 143 and 148 of the provisions of the Income Tax Act, where similar language had been employed. Under Section 143(2)(ii) there is a limitation on the A.O. not to issue notice if the period of twelve months had expired. Section 148 of the I.T. Act had come up for consideration before several High Courts. A learned Bench of the Madras High Court in Commissioner of Income Tax Vs. M. Chellappan and another, (2006) 281 ITR 444 (Mad) had occasion to consider the provision. The Assessing Officer proceeded to reassess under section 147 of the I.T. Act and completed the assessment without issuing notice under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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