2021 (7) TMI 513 - HC - Wealth-tax

Court sets aside Wealth Tax Act assessment orders, emphasizes need for detailed speaking orders. Respondent directed to comply within 3 months.

The court set aside the assessment orders under the Wealth Tax Act for specified years, emphasizing the necessity of a speaking order before passing such ... Re-opening of assessment under the Wealth Tax Act, 1957 - Orders passed under Section 18(1)(c) of the Wealth Tax Act - Validity of reopening of assessment - non speaking order passed - impugned orders preceded the issue on a notice under Section 17 of the Wealth Tax Act, 1957, which is pari materia with Section 147 of the Income Tax Act, 1961 - HELD THAT:- There is no dispute in the facts and circumstances of the case that no speaking order was passed before passing the impugned Assessment Orders. The provisions of the Income Tax Act, Wealth Tax Act as far as the reopening of the assessments are concerned are pari materia with Section 17 of the Wealth Tax Act, 1957 and Section 147 of the Income Tax Act, 1961. As rightly contended by the learned counsel for the petitioner, the decision of the Hon'ble Supreme Court in G.K.N.Driveshafts case [2002 (11) TMI 7 - SUPREME COURT] is to be applied even for re-opening of assessment under the Wealth Tax Act, 1957 - we therefore of the view, the impugned order deserves to be set aside. Accordingly, remit the case back to the respondent to pass a speaking orders on merits in accordance with law following the decision of the Hon'ble Supreme Court in G.K.N.Driveshafts case. Issues:Challenge to assessment orders under Wealth Tax Act, 1957 for Assessment Years 2008-2009, 2009-2010 & 2010-2011. Allegation of bypassing prescribed procedure. Requirement of a speaking order before passing assessment orders.Analysis:The petitioner challenged assessment orders dated 15.03.2016 under Section 18(1)(c) of the Wealth Tax Act, 1957 for the mentioned assessment years. The impugned orders were issued subsequent to a notice under Section 17 of the Wealth Tax Act, 1957, akin to Section 147 of the Income Tax Act, 1961. The petitioner sought reasons for reopening the assessment, which were provided on 16.10.2015. The impugned orders were contested on grounds of non-compliance with the procedure mandated by the Supreme Court in G.K.N.Driveshafts case.The petitioner argued that the Gujarat High Court decision in Arvind Mills Ltd. Vs Assistant Commissioner of Wealth Tax supports the requirement for a speaking order, aligning with the Supreme Court's stance in the G.K.N.Driveshafts case. Conversely, the respondent contended that the impugned order was well-reasoned, highlighting the petitioner's participation in the assessment proceedings before the orders were issued. The respondent urged for upholding the orders and dismissing the writ petitions.The court noted the absence of a speaking order before the impugned Assessment Orders were passed. Drawing parallels between the provisions of the Income Tax Act and Wealth Tax Act regarding assessment reopening, the court emphasized the necessity of a detailed order. Relying on the G.K.N.Driveshafts case, the court determined that the impugned order should be set aside, directing the respondent to issue speaking orders within three months, adhering to legal procedures. The petitioner's participation in the proceedings, if required, was to be facilitated through Video Conferencing.In conclusion, the court set aside the impugned orders, instructing the respondent to pass detailed orders in compliance with the law and the G.K.N.Driveshafts case. The writ petitions were disposed of without costs, and related Miscellaneous Petitions were closed.