9911796707
TMI Blog1995 (10) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... h-tax under section 25(2) of the Wealth-tax Act, 1957, for the assessment years 1959-60 to 1967-68 on the ground that on his own recorded findings, the Commissioner wrongly assumed jurisdiction ? " For the assessment years 1959-60 to 1967-68, the appellant-assessee filed returns on August 30, 1969, declaring the value of his house property at Rs. 5,02,762. Since the returns were filed beyond the prescribed period, the Wealth-tax Officer issued notices under section 18(1)(a) of the Act. The assessee filed revised returns disclosing higher valuation which were accepted by the Wealth-tax Officer. He made an assessment order accordingly, stating, inter alia, that the assessment was made under section 16(3). When these orders came to the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the submissions of the assessee. No assessment can validly be made under section 16(3) without issuing a notice under section 16(2). Such an assessment can always be challenged by the assessee legally even after the period for reopening the assessment under section 17 of the Wealth-tax Act is over. And if this happens, the Department would have no remedy for collecting the wealth-tax dues from the assessee for this year as it will be outside its purview. Therefore, the assessment order made by the Wealth-tax Officer is not only erroneous but also prejudicial to the interests of the Revenue." The assessee appealed to the Tribunal against the orders of the Commissioner. The Tribunal allowed the appeal on the reasoning, which being rather ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. The High Court answered the question aforesaid in favour of the Revenue on three grounds, viz., (1) the orders of the Wealth-tax Officer though purporting to be under sub-section (3) are in substance and effect under sub-section (1) of section 16 of the Act, since he had accepted the revised returns submitted by the assessee. It cannot, therefore, be said that the orders of assessment are defective for violation of section 16(2) of the Act ; (2) the Commissioner was well within his jurisdiction when he was satisfied that all the material facts necessary for the assessment had not been disclosed and that there had been an underassessment. In such cases, the Commissioner is empowered to exercise his jurisdiction under section 25(2) ; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return. (3) The Wealth-tax Officer, after hearing such evidence as the person may produce and such other evidence as he may require on any specified points, and after taking into account all relevant material which the Wealth-tax Officer has gathered, shall, by order in writing, assess the net wealth of the assessee and determine the amount of wealth-tax payable by him or the amount refundable to him on the basis of such assessment." The Commissioner then expressed the following apprehension, which forms the basis of his order : "Such an assessment can always be challenged by the assessee legally even after the period for reopening the assessment under section 17 of the Wealth-tax Act is over. And if this happens, the Department would hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be under sub-section (3), yet they cannot be held to be without jurisdiction merely because notice under sub-section (2) was not issued. Now, coming to the apprehension expressed by the Commissioner, which constitutes the basis of his order, it is, in our opinion, a remote one at best. Counsel for the Revenue could not also explain the observation of the Commissioner that if an assessment is made under sub-section (3) without issuing a notice under sub-section (2) of section 16, such an assessment can always be challenged by the assessee legally even after the period of reopening the assessment under section 17 is over and in which case, the Revenue will be totally helpless. In our opinion, the Commissioner has acted on certain assumption ..... X X X X Extracts X X X X X X X X Extracts X X X X
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