1982 (6) TMI 15 - HC - Wealth-tax

Court rules in favor of petitioner challenging tax assessment, quashing notices and ordering refunds.

The court ruled in favor of the petitioner, a wealth-tax assessee, challenging the WTO's jurisdiction to reopen assessments for the years 1972-73 to ... Omission To Disclose Fully And Truly, Reassessment, Wealth Tax Issues:Jurisdiction of the WTO in issuing notices under s. 17 of the W.T. Act for reopening assessments for the assessment years 1972-73, 1973-74, and 1974-75 challenged under art. 226/227 of the Constitution of India.Detailed Analysis:The petitioner, a wealth-tax assessee, had declared the value of agricultural land in previous assessment years based on an approved valuer's report, which was accepted by the WTO. However, the WTO reopened assessments for the years 1972-73 to 1974-75, alleging under-assessment due to the assessee's failure to disclose all material facts necessary for assessment. The petitioner contended that all primary facts regarding the land valuation were disclosed and accepted earlier, thus challenging the jurisdiction of the WTO to reopen the assessments under s. 17 of the W.T. Act.The WTO justified the reopening of assessments by claiming that the petitioner did not disclose the correct value of the agricultural lands, citing a sale in 1979 at a higher rate per bigha than declared earlier. The WTO's order estimated the value of the land to be much higher than declared, leading to under-assessment. The petitioner argued that the valuation was based on earlier disclosures and any doubts could have been clarified by the Department through independent valuation or market evidence, as per legal precedents like Calcutta Discount Co. Ltd. v. ITO. The petitioner maintained that all primary facts were disclosed, and no failure existed to warrant reopening under s. 17(1)(a) of the Act.The court noted the shifting stance of the respondents regarding the basis for reopening assessments, from non-disclosure to receipt of new information. Despite the confusion, the court focused on evaluating the action under s. 17(1)(a) of the W.T. Act. It emphasized that as the petitioner had disclosed all primary facts regarding land valuation for the relevant assessment years, there was no failure on her part to trigger the WTO's authority to reopen assessments. Relying on legal precedents, the court held in favor of the petitioner, quashing the notices issued by the WTO and ordering costs to be borne by the respondents, along with the refund of the security deposit to the petitioners.In conclusion, the court's judgment centered on the petitioner's compliance with disclosure requirements and the absence of any failure to provide material facts, thereby invalidating the WTO's jurisdiction to reopen assessments under s. 17(1)(a) of the W.T. Act for the assessment years 1972-73, 1973-74, and 1974-75.