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TMI Blog1984 (2) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... that jewellery was exempt from wealth-tax under s. 5(1)(viii) of the Act at the relevant time. Based on the same valuation, the assessees filed their returns for the year 1969-70 and they were also accepted as per the assessment order, dated December 20, 1969. As already stated above, the claim of exemption of the assessees-petitioners was initially rejected by the assessing authority, i.e., the WTO, but later it was accepted on appeal but again on account of the amendment in s. 5(1)(viii) retrospectively w.e.f. April 1, 1963, the matter of Smt. Saroj Devi for the year 1969-70 was settled by a reassessment order, dated March 26, 1973, and those of the others by rectification orders, dated December, 27, 1971, and the jewellery and ornaments, accepting their valuation as furnished by the assessees, were brought to tax. Similarly, the valuation of the jewellery shown in the returns filed for the year 1970-71 were accepted by the WTO. Later, when the assessees filed their returns for the year 1971-72, valuing their ornaments and jewellery at much higher figures in comparison to the valuations of the years 1969-70 and 1970-71, it appears that the wealth-tax authorities entertained a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on April 13, 1976, and restraining him from taking any proceedings in pursuance of those notices. The case of the petitioners is that proceedings under s. 17 could not have been initiated against the petitioners in these circumstances because if the proceedings are deemed to be under s. 17(1)(b), they were clearly barred by time since more than four years from the end of the relevant assessment years had already expired before these notices were issued and thereafter the WTO had no jurisdiction to issue such notices under s. 17(1)(b). If the proceedings are deemed to be under s. 17(1)(a), then as the petitioners had already furnished the returns, the first part of that section is not applicable and as the petitioners were not guilty of not disclosing fully and truly all material facts necessary for assessment Of their net wealth, the second part of s. 17(1)(a) was not attracted. The Revenue has filed a return to the writ application and it has been stated that the notice under s. 17 has been issued under cl.(1)(a) of that section, as the petitioners-assessees had not disclosed true and correct valuation of the jewellery in their returns of wealth and they had filed false and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me, profits and gains chargeable to tax have been under-assessed and the second is that he must have also reason to believe that such under-assessment has occurred by reason of either, (1) omission or failure on the part of an assessee to make a return of his income, or (ii) omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for that year. According to their Lordships, unless both these conditions are fulfilled, the assessing authority will have no jurisdiction to issue a notice for the assessment or reassessment beyond the period of four years but within the period of eight years, from the end of the year in question. Then their Lordships further pointed out that where the assessee discloses the primary facts fully and truly, he has done his duty and he has nothing further to do and, in that case, he cannot be proceeded against under s. 34(1) of the I.T. Act as the case was before their Lordships. This view has further been reiterated in ITO v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC), and also by our own court in Purushottam Das Bangur v. ITO [1980] 126 ITR 580. 1 am purposely not discussing the matter in d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notice issued by the WTO on November 16, 1973, would bear this out. Again in the later notices, dated January 12, 1976, and January 19, 1976, also, the WTO does not refer to any such reason except stating that some audit objections were pending and there were directions by the higher authorities to get the jewellery revalued. The audit objection or the direction of the higher authorities for revaluation also cannot furnish any material on the basis of which the WTO can be said to have reason to believe that the assessees had not disclosed fully and truly all material facts. In CWT v. Chhatrshal Sinhji D. Zala [1982] 135 ITR 826, a Division Bench of the Gujarat High Court, in similar circumstances, had observed as under (p. 829) : " The assessee had in his returns for the assessment years under reference disclosed the palace as one of his assets and offered its estimated value for wealth-tax. The WTO accepted the wealth returned by the assessee. Under these circumstances, it cannot be said that the assessee had omitted or failed to disclose fully and truly all material facts necessary for the assessment of his net wealth. It is true that in his return for the assessment year 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e correctness of the valuation, it was open to the Department to get the same valued by its own valuer or to have recorded evidence about the real market value of the lands on the valuation date. Section 17(1)(a) of the W.T. Act does not empower the Revenue to reopen the final assessment, even though by oversight, carelessness or inefficiency on the part of its officer, proper investigation was not carried out though all the primary facts which the assessee was required to place before him had been so placed. This is the considered view of the Supreme Court in Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191, Gemini Leather Stores v. ITO [1975] 100 ITR 1 and ITO v. Madnani Engineering Works Ltd. [1979] 118 ITR 1. As the assessee had placed all the primary facts before the WTO for the assessment years in question with regard to the value of the agricultural land, there was no failure on her part which would entitle the WTO to take recourse to s. 17(1)(a) of the Act for reopening the assessments. " The Patna High Court in Durga Sharan Udho Prasad v. CIT [1976] 103 ITR 270, also has fallen in line with this view. In that case, the matter was under section 147(a) of the I.T. Act ..... 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