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TMI Blog1999 (11) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... lands on the relevant dates?" The assessments relating to the late C. Seshachalam Chetty by an executor V. R. Bakthavatsalam, 97, Wallajah Road, Madras-2, for the assessment years 1965-66 to 1968-69 were reopened to include the value of 89 grounds owned by the assessee at Taylors Road, Kilpauk, Madras, under section 7 of the Act on the basis of the alleged information furnished by the internal audit party. The abovesaid property was mentioned in the wealth-tax returns of the assessee for the earlier assessment years as agricultural land, which was acquired for the construction of staff quarters for the Telephone Department on December 29, 1969. Compensation of Rs. 11,22,273 was,given to the assessee. The assessee who had executed a will on August 23, 1969, has referred to the abovesaid land as vacant site in the said will and filed a petition claiming Rs. 27,000 as value per ground. A notification under section 9 of the Madras Urban Land Tax Act was published, in the Gazette dated September 30, 1964, with regard to Egmore Village, in which the land in dispute bearing S. No. 156 was described as residential area and subjected to assessment of urban land tax from 1963. Though the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 66, on March 31, 1971, in respect of the assessment year 1966-67 and on March 31, 1972, in respect of the assessment year 1967-68, that notice was issued by the Wealth-tax Officer to the assessee only on March 16, 1975, and served on the executor on March 21, 1975, and, therefore initiation of proceedings under section 17(1)(b) of the Act with regard, to the abovesaid assessment years by the Assessing Officer was without jurisdiction. In respect of the assessment year 1968-69, the appellate authority was of the view that the proceedings initiated by the Wealth-tax Officer were within time. The appellate authority was of the further view that the Wealth-tax Officer has not independently applied his mind to find out as to whether the information that the land was not agricultural land was correct on the facts of the case or otherwise and, therefore, the Assessing Officer had no reason to believe, in view of the abovesaid information in his possession, that the wealth had escaped assessment. The appellate authority was of the further view that the view expressed by the internal audit party that the lands are non-agricultural is the opinion of the audit party and does not amount to dra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot rely on section 17(1)(a) of the Act, that if section 17(1)(b) of the Act is applied, the assessments for the firs three years are barred by time, that the Wealth-tax Officer will have no information to reopen the assessment for the assessment year 1968-69 as the internal audit report cannot be termed to be information, within the meaning of section 17(1)(b) of the Act in the light of Indian and Easten Newspaper Society v. CIT [1979] 119 ITR 996 (SC) and accordingly confirmed the order of the appellate authority, thereby dismissing the appeals preferred by the Department. It is only under the abovesaid cir cumstances, these tax case references have been made for the opinion of this court. The rival submissions made by the Department as well as the assessee were considered in depth in the light of the material evidence available on record, The fact remains that the late C. Seshachalam Chetty was owning 89 grounds in S. No. 156 of Egmore Village at Taylors Road, Madras, apart from the other properties owned by him. Admittedly, the assessee was submitting wealth-tax returns up to 1963-64 on the ground that the above said 89 grounds were agricultural lands, used for agricultural pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t report was communicated to the Wealth-tax Officer stating that the late Seshachalam Chetty had claimed the abovesaid 89 grounds of land as agrictiltural land in the wealth-tax returns submitted up to 1964-65, that there is no mention about the abovesaid property in the wealth-tax returns submitted thereafter that the assessee had claimed the income from the abovesaid lands as Rs. 400, Rs. 400, Rs. 350 and Rs. 600, for the assessment years ending with March 13, 1968, March 31, 1967, March 31, 1966 and March 31, 1965, respectively with a view to avoid wealth-tax liability, that the assessee himself had described the abovesaid land as vacant site in the abovesaid trust deed and that therefore, the wealth-tax assessment of the assessee should be reopened for five years from 1964-65 to 1968-69 and the abovesaid land has to be assessed to wealth-tax at the appropriate value in the light of the award in the land acquisition proceedings and also in the light of the higher claim made by the assessee before the City Civil Court, Madras. Based on the abovesaid communication, the Assessing Officer ordered issue of notice under section 17 of the Act for the assessment years 1964-65 to 1968- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or agricultural purposes, cannot, turn round and say that the assesseehad not fully and truly disclosed about the demised property during the abovesaid assessment years or concealed particulars of his wealth in respect of the abovesaid property. Therefore, the Appellate Tribunal was justified in coming to the conclusion that the Assessing Officer has no right to reopen the assessment under section 17(1)(a) of the Act. The Appellate Tribunal had considered as to whether such reopening of assessment can be made under section 17(1)(b) of the Act. It is not in dispute that the assessment can be reopened by issue of notice under section 17(1)(b) of the Act only within a period of four years from the end of the particular assessment year and not beyond that period. The fact remains that four years period ended on March 31, 1970, in respect of the assessment year 1965-66 on March 31, 1971, in respect of the assessment year 1966-67 and on March 31, 1972, in respect of the assessment year 1967-68. Admittedly notice was issued by the Assessing Officer on March 6, 1975, regarding the reopening of the abovesaid assessment and the same was served on the executor of the will on March 21, 1975. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile doing so. While sustaining such conclusion, the Appellate Tribunal has rightly held that the internal audit report referred to above was a note on a question of law or on an interpretation of law and, therefore, the same cannot be an information within the meaning of section 17(1)(b) of the Act in view of the decision of the apex court (Indian and Eastern Newspaper Society v. CIT [1979] 119 ITR 996). Therefore, the Appellate Tribunal was also right in coming to the conclusion that the Assessing Officer was not justified in reopening the assessment for the abovesaid assessment years since the internal audit report will not amount to information even for the assessment year 1968-69. Learned counsel for the Revenue brought to the notice of this court the decision of the apex court in Sarifabibi Mohmed Ibrahim v.CIT [1993] 204 ITR 631, wherein it was held as follows: "Whether a land is an agricultural land or not is essentially a question of fact. Several tests have been evolved in the decisions of this court and the High Courts, but all of them are more in the nature of guidelines. The question has to, be answered in each case having regard to the facts and circumstances of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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