Wealth-tax reassessment and retrospective valuation rule: audit objection was not fresh information, and reopening failed.

Reassessment under section 17(1)(b) of the Wealth-tax Act was unsustainable where the Wealth-tax Officer had already applied his mind to the valuation issue in the original assessment and the audit objection did not constitute fresh information. Rule 1BB of the Wealth-tax Rules was treated as retrospective and applicable to pending assessment proceedings, so the statutory formula for valuation governed the case. On the facts stated, these principles meant the reopening could not be justified and the reassessment failed.

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Issues: Whether reassessment could validly be initiated under section 17(1)(b) of the Wealth-tax Act on the basis of an audit objection, and whether rule 1BB of the Wealth-tax Rules governed the valuation of the property for the assessment year in question.

Analysis: The reassessment was held to be unsupported because the Wealth-tax Officer had already applied his mind to the valuation issue in the original assessment, and the audit note was not treated as fresh information within section 17(1)(b). It was also noted that rule 1BB of the Wealth-tax Rules operated retrospectively and applied to pending assessment proceedings, with the result that the value determined on the statutory formula could not sustain the reopening on the facts found.

Conclusion: The invocation of section 17(1)(b) was invalid and the reassessment could not be sustained.

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