Wealth-tax reassessment notice quashed after taxpayer disowned property ownership and the original factual basis disappeared.

A reassessment notice issued under section 17 of the Wealth-tax Act, 1957, loses its basis when the factual foundation on which it was issued no longer survives. Here, the notice rested on the petitioner's earlier claim of ownership of the property, but he later filed an affidavit disowning ownership, abandoned that plea, dropped the Union of India from the suit, and withdrew the suit. Once those statements were made, the original basis for the notice ceased to exist and the notice became incapable of effective operation. It was therefore treated as infructuous and quashed.

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Issues: Whether the notice issued under section 17 of the Wealth-tax Act, 1957, was liable to be quashed after the petitioner unequivocally disowned ownership of the property in question and the original basis for the notice no longer survived.

Analysis: The notice under section 17 was initially founded on the petitioner's own claim of ownership over the property. Subsequently, the petitioner filed an affidavit stating that he was not the owner, had given up the plea of ownership, had dropped the Union of India from the earlier suit, and had withdrawn that suit. In these circumstances, the factual foundation for the reassessment notice ceased to exist, and the notice became incapable of further effective operation.

Conclusion: The notice under section 17 of the Wealth-tax Act, 1957, was rightly treated as infructuous and was quashed.

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