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2022 (1) TMI 1054
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....d and therefore, her legal heirs were brought on record as the respondents 2 to 7 to this appeal. 3. For the sake of convenience, the parties are referred to, as per their original status i.e., appellant as Revenue and the respondent / writ petitioner as assessee. 4. The case of the assessee as projected in the writ petitions would run thus: The assessee had filed her returns of wealth for the assessment years 1990-91 to 1995-1996, on 30.08.1990, 13.08.1991, 10.03.1993, 14.07.1995, 14.07.1995 and 14.07.1995 respectively. After processing the assessment under section 16(1) of the Wealth Tax Act, 1957, notices under section 17 were issued on 17.11.2000 stating that there was escaped assessment and calling upon the assessee to file revised returns, on the ground that the property at Mugappair owned by the assessee was sold in the year 1995 for a higher price of Rs. 1,33,00,000/-. In response to the same, the assessee filed her return for the assessment year 1996-97, disclosing the taxable income at Nil. Whereas, in respect of the other assessment years, she filed her replies requesting to treat the returns originally filed as having filed in response to the said notices. Afte....
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....n 03.06.1995 and the said property was developed to be a commercial property as on 01.04.1981 during the assessment proceedings for the year 1996-97. Thus, the assessee had not made a full and true disclosure of wealth, which warranted issuance of notice dated 17.11.2000 and consequential reassessment orders under section 17 of the Wealth Tax Act, for the assessment years in question. The learned senior standing counsel would further contend that the returns filed by the assessee were only processed under Section 16 (1) and no assessment orders under Section 16 (3) were passed and therefore, as per explanation (b) to section 17, the net wealth chargeable to tax had escaped assessment and accordingly, the reassessment proceedings were validly initiated. It is also submitted that the assessee has an alternative remedy of appeal as against the reassessment orders, but she straight away approached this court by filing the writ petitions. Thus, according to the learned senior standing counsel, without considering the said aspects in a proper perspective, the learned single Judge allowed the writ petitions by the order impugned herein, which is liable to be set aside, as it is illegal an....
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....nd offered for assessment. Accordingly, the value of the property was declared as Rs. 21,60,000/- for the assessment year 1993-94, Rs. 22,80,000/- for the assessment year 1994-95 and Rs. 24,00,000/- for the assessment year 1995-96. Since the property was sold before the valuation date and was not liable to be included in the net wealth, the assessee did not file her returns for the assessment year 1996-97. However, in response to the notice under section 17, she filed her return for the said year 1996-97. It was the specific claim of the assessee that since the property belonged to all the five members of the family, the sale consideration of the same was distributed to each individual and accordingly, she was received one-fifth share thereof, which was deposited in the name of her husband. Thus, there has not been any omission or failure on the part of the assessee to disclose fully and truly all materials facts, warranting the assessing officer to reopen the assessment under section 17 of the Act. 11. On the other hand, the Revenue pleaded that the subject property was not used for agricultural activities; it was developed to be a commercial property as on 01.04.1981; and the ....
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.... Provided further that the Assessing Officer shall, before issuing any notice under this sub-section, record his reason for doing so; Provided also that the Assessing Officer may assess or reassess such net wealth, other than the net wealth which is the subject matter of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Provided that, after the expiry of four years from the end of the relevant assessment year, no notice shall be issued unless the Chief Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer aforesaid, that it is a fit case for the issue of such notice. Provided that the provisions of this sub-section shall not apply in any case where any such assessment or reassessment relates to an assessment year in respect of which an assessment or reassessment could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any provision limiting the time within which any action for assessment or reassessment may be taken." The aforesaid provisions postulate that for invoking Section ....
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....e year 1995; and thus, the assessee did not adopt the fair market value of the property for determining the IT purposes. 14. When the said reassessment orders were put to challenge in the writ proceedings, the learned single judge, placing reliance on the decision of this court in the Commissioner of Wealth Tax v. Smt. Suguna Mahadevan and others (supra), held that the question of reopening the assessment for the purpose of redetermination of the value of the property based on the subsequent year's sale, as such, does not arise. In that case, in similar situation, this court pointed out that it is not permissible to the assessing officer to rely upon an event of sale, which took place subsequent to the assessment year in question, to determine the value of the property as on the valuation date, relating to the assessment year in question; and such method is not known in the field of income capitalisation method. The relevant passage of the said decision is usefully extracted below: "3. We are of the view that it is not at all permissible to the Assessing Officer or for that matter the Tribunal to rely upon an event of sale which takes place subsequent to the assessm....
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....ed we are of the view that no referable question of law as raised by the petitioner arises in these cases. Accordingly, the tax case petitions are rejected." 15. In this context, a decision of this Court in Commissioner of Wealth Tax v. V.Vatsala reported in (1989) 177 ITR 120 cited on the side of the assessee is also worth mentioning. In that case, the assessee submitted her return of wealth for the assessment year 1973-74 on 22.06.1973 declaring the value of her property at Rs. 38,000/-, which according to the assessee was the value as exist in the year 1968. The assessee also disclosed that she purchased the property on 10.06.1971. Subsequent to the filing of the return, the assessee entered into an agreement for sale on 06.10.1973 for Rs. 75,000/-. The assessee filed a revised return in which she had disclosed some of the jewelleries, which she omitted to include. However, insofar as the property purchased by her on 10.06.1971, she did not disclose the sale agreement entered into in October, 1973. The Wealth Tax Officer was of the view that the value of the property shown in the return as Rs. 38,000/- cannot be accepted as the assessee had sold it for Rs. 70,000/- during Jan....
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....considered to be the value as on 31st March, 1973. So looked at, the assessee cannot be stated to have concealed any particulars even with reference to the value of the property. There is, therefore, no question of the assessee having concealed particulars of any asset or furnished inaccurate particulars of any asset attracting the levy of penalty under S.18 (1) (c) of the Act. We hold that the Tribunal was right in the view it took that no case is made out for the levy of penalty. We, therefore, answer the questions referred in the affirmative and against the revenue. The assessee will be entitled to the costs of this reference. Counsel's fee Rs. 500." 16. In the light of the aforesaid legal proposition, this court is of the view that the reopening the assessment by the assessing officer, based on the event of sale, which had taken place subsequently, to redetermine the value of the property for the assessment years in question, is not legally sustainable. Accordingly, the learned single judge rightly held so in the writ petitions filed by the assessee challenging the reassessment proceedings. 17. That apart, in the present case, admittedly, the assessee had filed her re....