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Issues: (i) whether the assessee's consent during the reassessment enquiry could confer jurisdiction to reopen the completed assessment under section 35; (ii) whether the partition deed in favour of the minor children could be treated as a transfer, direct or indirect, so as to attract section 9(2)(iv).
Issue (i): Whether the assessee's consent during the reassessment enquiry could confer jurisdiction to reopen the completed assessment under section 35.
Analysis: The reassessment was initiated on the premise that the earlier composition assessment was wrong and had to be revised only if the statutory conditions for reopening were satisfied. Jurisdiction to revise or reopen could arise only from the existence of a legally sustainable ground for escape or error in the original assessment. A statement or consent recorded from the assessee during the enquiry could not by itself create the statutory power to reopen an assessment where such power was otherwise absent.
Conclusion: The consent did not confer jurisdiction to reopen the assessment.
Issue (ii): Whether the partition deed in favour of the minor children could be treated as a transfer, direct or indirect, so as to attract section 9(2)(iv).
Analysis: The deed on its face contained the essential attributes of a partition. The character or validity of the partition, including whether the daughters were entitled to shares, was not a matter for the revenue to adjudicate in the reassessment proceedings. Since partition is not a transfer in law, there was no basis to treat the allotment of shares under the deed as a direct or indirect transfer for the purpose of section 9(2)(iv).
Conclusion: The partition could not be treated as a transfer and section 9(2)(iv) was inapplicable.
Final Conclusion: The reassessment orders and the revisional orders were liable to be quashed for want of jurisdiction and for legal error in treating a valid partition as a transfer.
Ratio Decidendi: Consent of an assessee cannot confer statutory jurisdiction to reopen an assessment, and a valid partition is not a transfer for the purpose of provisions aimed at direct or indirect transfers.
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