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TMI Blog2005 (2) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... 7(1) was issued on November 14, 1981, for filing the return for the purpose of assessment of his wealth. We hold that the proceedings of assessment will be deemed to have commenced on November 14, 1981. - it is held that the Tribunal was not right in cancelling the order passed by the Commissioner under section 25(2) - - - - - Dated:- 8-2-2005 - Judge(s) : G. S. SINGHVI., VINEY MITTAL. JUDGMENT The judgment of the court was delivered by G.S. Singhvi J.-In exercise of its power under section 27(1) of the Wealth-tax Act, 1957 (for short, "the Act"), the Income-tax Appellate Tribunal, Delhi Bench "C", Delhi (for short, "the Tribunal") has referred the following question of law for the opinion of this court in relation to the assessment years 1979-80 and 1980-81: "Whether on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal is right in law in cancelling the order passed by the then Commissioner of Wealth-tax under section 25(2) of the Wealth-tax Act, 1957?" For deciding the aforementioned question, we have taken the facts from the statement of the case sent by the Tribunal in this reference and W.T.R. No. 2 of 1999, which relates t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 16A of the Act. The Tribunal then referred to section 17A(1)(b) of the Act and held that the Wealth-tax Officer did not have the jurisdiction to frame assessment after the expiry of 4 years from the date of filing of the return or revised return. Shri Rajesh Bindal, learned counsel for the Revenue argued that the view taken by the Tribunal on the validity of reference made by the Wealth-tax Officer to the Departmental Valuation Officer is patently erroneous and the Commissioner did not commit any illegality by relying on the report dated March 14,1985, because in terms of section 16A(1)(b) read with section 16A(4) of the Act, reference can be made to the Valuation Officer, even if no return has been filed by the assessee. He further argued that the proceedings of assessment will be deemed to have commenced with the issuance of notice dated November 14, 1981, under section 17 of the Act and, therefore, the Wealth-tax Officer did not commit any illegality when he asked the Departmental Valuation Officer to value the assessee's property. Shri Bindal also assailed the Tribunal's conclusion on the issue of limitation and argued that it committed a serious error by holding that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount as may be prescribed in this behalf; or (ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do. (2) For the purpose of estimating the value of any asset in pursuance of a reference under sub-section (1), the Valuation Officer may serve on the assessee a notice requiring him to produce or cause to be produced on a date specified in the notice such accounts, records or other documents as the Valuation Officer may require. (3) Where the Valuation Officer is of opinion that the value of the asset has been correctly declared in the return made by the assessee under section 14 or section 15, he shall pass an order in writing to that effect and send a copy of his order to the Wealth-tax Officer and to the assessee. (4) Where the Valuation Officer is of opinion that the value of the asset is higher than the value declared in the return made by the assessee under section 14 or section 15, or where the asset is not disclosed or the value of the asset is not declared in such return or where no such return has been made, the Valuation Officer shall serve a notice on the assessee intimating the value which he proposes to est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... encing on or after the 1st day of April, 1975." An analysis of section 16A of the Act makes it clear that for the purpose of making the assessment, the Wealth-tax Officer can refer the valuation of any asset to a Valuation Officer. Clause (a) of section 16A(1) empowers the Wealth-tax Officer to make a reference if he is satisfied that the value of the asset returned by the assessee is less than its fair market value. Clause (b) contemplates the making of a reference in any other case if the Wealth-tax Officer is satisfied that the fair market value of the asset exceeds the value disclosed in the return filed by the assessee by a particular percentage or the amount as may be prescribed in that behalf or having regard to the nature of the asset and other relevant circumstances, he considers it necessary to do so. Sub-section (4) of section 16A lays down that where the Valuation Officer is satisfied that the value of the asset is higher than the value declared in the return or where the asset is not disclosed or the value of the asset is not declared in such return or where no such return has been made, he shall serve a notice on the assessee intimating the value which he proposes t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Shri Suvir Sehgal that the proceedings of assessment cannot be treated to have commenced till the filing of the return sounds attractive, but on a closer scrutiny, we are unable to accept the same. In Khazan Chand Nathi Ram v. State of Haryana [2004] 136 STC 261 (P H), a Division Bench of this court, while considering the question whether the right to appeal available under the Haryana General Sales Tax Act, 1973 survives after its repeal by the Haryana Value Added Tax Act, 2003, observed as under: "36. In civil proceedings, lis commences on the presentation of the plaint or in cases claiming compensation under the Motor Vehicles Act on filing claim application. The question is when lis can be said to commence under the taxation laws. Section 25 of the HGST Act enjoins a duty upon an assessee to file quarterly return and deposit tax thereon. If such returns are accepted, there is no lis. Consequently, there would be no occasion for the parties to file an appeal. However, if such returns are not accepted, the cause of action which arise on the date when returns are required to be filed. The cause of action can be said to be arisen also when an assessee is called upon to furni ..... X X X X Extracts X X X X X X X X Extracts X X X X
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