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TMI Blog1990 (7) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... having half share in the house property bearing premises No. 12, Millers Road, Bangalore, declared the total value of the building at Rs. 1,80,000 and the half share of each of them at Rs. 90,000. The whole of the area including the building was 5,775 sq. yards. The assessing authority did not accept the valuation furnished by the respondents. He fixed the value of the house property as on March 31, 1971, the date of valuation as follows : " The value as on March 31, 1971, is fixed as follows : Rs. No. 12, Miller's Road property 5,775 sq. yards at Rs. 55 per sq. yard 3,17,625 Cost of materials (excluding 25% of the area for layout) 10,000 ----------------- Assessee's half share therein Rs. 2,13,812 4,27,625 " ------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel for the appellant, contended that as the Wealth-tax Officer had reasons to believe that the respondents had failed to disclose fully and truly all material facts necessary for the assessment of his net wealth for the assessment year 1972-73, the Wealth-tax Officer had jurisdiction to initiate action under section 17(1)(a) of the Act. He submitted that so long as the basis on which the action was initiated had nexus to the exercise of jurisdiction under section 17(1)(a) of the Act, this court could not have interfered under article 226 of the Constitution and even assuming that the respondents had any valid defence for the notices that should have been allowed to be taken in reply to the show cause notice. There can be no doubt that, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lth-tax Officer. He made his own computation and fixed the value of the property at the rate of Rs. 55 sq. yard and after giving deduction to the extent of 25 per cent. to the area and the cost of material at Rs. 10,000, computed the value of the property at Rs. 4,27,625 and half share of it was assessed at the hands of each of the assessees. Section 17 of the Wealth-tax Act, 1957, which confers jurisdiction on the Wealth-tax Officer to assess or reassess the escaped turnover, reads : "17(1) If the Wealth-tax Officer (a) has reason to believe that by reason of the omission or failure on the part of any person to make a return under section 14 of his net wealth or the net wealth of any other person in respect of which he is assessable unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided that the provisions of this sub-section shall not apply in any case where any such assessment or reassessment relates to an assessment year in respect of which an assessment or reassessment could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any provision limiting the time within which any action for assessment or reassessment may be taken." As can be seen from clause (a), the condition precedent for the exercise of power under that provision to initiate action is that the assessing authority must have reasons to believe that, on account of omission or failure on the part of the assessee to disclose his net wealth or his failu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing authority for initiating action under section 17(1) (a) of the Act reads : "Note :-In the assessment order made on February 7, 1973, the value of the Millers Road property (the assessee's half share being 50%) is taken at Rs. 2,13,812 as against assessee's declared value of Rs. 90,000. As per the voluntary disclosure made by the assessee, the property was sold in the year ending March 31, 1973, and 1974. The total consideration for the property received by the assessee comes to Rs. 8,00,998. Thus, the assessee's half share of the property comes to Rs. 4,00,499. The assessee has not disclosed the value correctly and truly in the return of wealth filed by the assessee. Wealth has escaped assessment. Issue notice under section 17." It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Officer felt that even the valuation made by him in the assessment order was not correct, he could have certainly invoked his jurisdiction under section 17(1)(b) and reopened the assessment and made a reassessment under that clause. But that he could do within a period of four years from the end of the assessment year. As that date in this case was March 31, 1973, and the notice was issued on November 24, 1978, it was time-barred under section 17(1)(b). If the notice had been issued within four years, though wrongly under section 17(1)(a), we would have sustained it under clause (b). But it is not possible as the notice was time-barred under section 17(1)(b). It is no doubt true that action was not time-barred under section 17(1)(a) as th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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