Valuation cell reference must be made during pending assessment proceedings or the reassessment fails.

A reference to the valuation cell under the Wealth-tax Act is valid only when made in the course of pending assessment proceedings. Because the Wealth-tax Officer made the reference before any assessment was pending, the statutory condition for invoking the valuation mechanism was absent and the reassessment could not be treated as validly reopened. The Tribunal was therefore justified in cancelling the assessment, and its view was supported by the High Court authorities relied upon in the judgment.

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Issues: Whether the Wealth-tax Officer could validly make a reference to the valuation cell before assessment proceedings were pending, and whether the Tribunal was justified in holding that the reassessment was not validly reopened and in cancelling the assessment.

Analysis: Section 16A of the Wealth-tax Act, 1957 authorises a reference for valuation in the course of assessment proceedings. On the facts, the reference to the valuation cell was made when no assessment proceedings were pending, so the statutory precondition for such reference was absent. The Tribunal's view was supported by the relevant High Court decisions relied upon in the judgment.

Conclusion: The Tribunal was right in holding that the assessment was not validly reopened and in cancelling the assessment.

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