9911796707
TMI Blog1995 (3) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... he Wealth-tax Act, 1957. The audit indicated that in the original assessment relief was wrongly granted on the Coimbatore property since it was not wholly a residential property. The third objection, the audit raised, related to the assessee's shares in lands (Nawab Gardens) at Adyar. The original assessment was called incorrect in the audit note on the ground that a certain compensation offered by the Housing Board to the owner of a neighbouring property some years before the accounting year, was not taken into consideration and the original assessment overlooked the sale value of the land in the vicinity. For the assessment year 1972-73, the audit noted that the relief under section 5(1) of the Wealth-tax Act should be given to the firm (partnership) and not to each partner separately. The Wealth-tax Officer took the audit objections as information under section 17(1)(b) of the Wealth-tax Act and accordingly revised the assessment. The appellate authority rejected the objections of the assessee, saying " the recomputation made by the Wealth-tax Officer, is a matter rectifiable under section 17(1)(b), if the successor Wealth-tax Officer on a study of the records, obtains the infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were not incorrect, it certainly involved interpretation of the law on which there could be two opinions. Hence, this could not constitute information in view of the later Supreme Court decision. The Tribunal has thus concluded that the audit notes/objections which were taken as information for reassessment, were not such information, which gave any basis to the Wealth-tax Officer to reopen the assessment. The Tribunal has noted that the Supreme Court has in Indian and Eastern Newspaper Society v. CIT [1979] 119 ITR 996 pointed out that the opinion of the audit party on a point of law could not be regarded as an information enabling the Income-tax Officer to initiate reassessment proceedings under section 147(b) of the Income-tax Act and that the proposition in the decision of the Supreme Court in the case of Kalyanji Mavji and Co. v. CIT [1976] 102 ITR 287 to the effect that a case where income has escaped assessment due to the " oversight, inadvertence or mistake " of the Income-tax Officer must fall within section 34(1)(b) of the Indian Income-tax Act, 1922, is stated too widely and travels farther than the statute warrants in so far as it can be said to lay down that if, on rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " We have pointed out earlier that Kalyanji Mavji's case [1976] 102 ITR 287 (SC), outlines four situations in which action under section 34(1)(b) can be validly initiated. Indian and Eastern Newspaper Society's case [1979] 119 ITR 996 (SC) has only indicated that proposition (2) outlined in this case and extracted earlier may have been somewhat widely stated ; it has not cast any doubt on the other three propositions set out in Kalyanji Mavji's case [1976] 102 ITR 287 (SC). The facts of the present case squarely fall within the scope of propositions (2) and (4) enunciated in Kalyanji Mavji's case [1976] 102 ITR 287 (SC). " The Supreme Court considered it a relevant and good ground to reopen the assessment when a High Court's decision on the subject was rendered and was available, but the Assessing Officer was unaware of it. We have in M. A. Chidambaram v. CIT [1995] 216 ITR 175 (Tax Case No. 79 of 1982 order dated January 31, 1995) said as follows (at page 176) : " It is conceded at the Bar that the audit report which only will point out a mistake in law, since the auditors are not interpreters of law, their interpretation will not be furnishing the necessary information. In case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance (No. 2) Act of 1971, with effect from April 1, 1972. On the question, whether relief under section 5(1)(x) of the Wealth-tax Act, should be given to the firm and not to each partner separately, the Tribunal has said, the audit view is wrong. Even if the audit view of the law was the correct view, it obviously could not ask the Wealth-tax Officer to reopen the assessment. On the question, however, of shares in land and the valuation, the audit, the Tribunal has noted, insisted the supposedly comparative sale at Rs. 10,500 to the Tamil Nadu Housing Board, in respect of some other land in the area, as justifying higher valuation. We wanted, in the circumstances, to know whether as to the offer of a price of Rs. 10,500, any land in the vicinity of the land allegedly undervalued, was sold for a higher consideration for some other reasons, which did not attach to the assessee's land in the proceeding after reopening of the assessment ; the Wealth-tax Officer has said ' in June, 1971, M. A. C. Charities has been paid compensation at Rs. 10,500 per ground by the Tamil Nadu Housing Board for 28.85 acres of land. These lands were in the neighbourhood of the immovable property in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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