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of <h1>Court quashes reassessment notices for lack of jurisdiction & time bar</h1> <h3>HEH. Nizams Jewellery Trust Versus Assistant Commissioner Of Wealth-Tax And Others</h3> The court quashed the reassessment notices issued under section 17 of the Wealth-tax Act, 1957, due to lack of jurisdiction and being barred by ... Failure To Disclose, Valuation Officer, Valuation Report, Wealth Tax Issues Involved:1. Validity of notices issued u/s 17 of the Wealth-tax Act, 1957.2. Jurisdiction of the Wealth-tax Officer in reassessing valuations made by the Valuation Officer.3. Limitation period for issuing reassessment notices.Summary:1. Validity of Notices Issued u/s 17 of the Wealth-tax Act, 1957:The petitioners challenged the validity of the notices issued u/s 17 of the Wealth-tax Act, 1957, for the assessment years 1984-85 to 1989-90. The Wealth-tax Officer proposed to revise the valuations on the ground that net wealth chargeable to tax had escaped assessment due to underassessment. The reasons cited included the determination of fair value of the jewellery at Rs. 171 crores in Supreme Court proceedings and the valuer's admission of errors in his valuation. The petitioners argued that all relevant information was disclosed and that the valuation was made under section 16A, not based on the return.2. Jurisdiction of the Wealth-tax Officer in Reassessing Valuations Made by the Valuation Officer:The court held that the valuation of assets is a matter of opinion and cannot be reassessed by the Wealth-tax Officer under section 17. The valuation made by the Valuation Officer under section 16A is binding on the Wealth-tax Officer. The court emphasized that the jurisdiction of the Wealth-tax Officer in respect of the valuation of an asset was transferred to the Valuation Officer, and no right to revise such an estimate is reserved under section 17. The contention that this would lead to discrimination was rejected, as it amounts to reasonable classification between valuations by the Wealth-tax Officer and the Valuation Officer.3. Limitation Period for Issuing Reassessment Notices:The court found that the reassessment notices were barred by limitation. The proviso to section 17 states that reassessment cannot be made after four years from the end of the relevant assessment year unless there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. The court concluded that there was no such failure by the assessee, as the valuation was based on the Department's own valuation for earlier years, and all relevant facts were disclosed. Consequently, the impugned notices were quashed for being issued beyond the permissible period.Conclusion:The court allowed the writ petitions, quashing the reassessment notices issued u/s 17 of the Wealth-tax Act, 1957, due to lack of jurisdiction and being barred by limitation. The oral application for leave to appeal to the Supreme Court was refused as the case did not involve any substantial question of law of general importance.
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