Law:

Section:

Section 17 of the Wealth-tax Act, 1957 - Income escaping assessment - Position prior to 1-4-1989 - Assessment years 1981-82 to 1983-84 - For assessment years 1981-82 to 1983-84 original assessments were duly completed in 1986 or before - In September 1992 reassessment notices were issued - Ultimately reassessment was made by valuing property on basis of valuation report obtained for assessment year 1989-90, in cases of properties held by erstwhile members of family in their hands respectively - Whether it was a case falling within proviso to section 17(1) whereunder no proceeding under section 17 could have been initiated after expiry of four years from end of relevant assessment year, that is to say, 31-3-1986, 31-3-1987 and 31-3-1988, respectively, in case of assessment years 1981-82, 1982-83 and 1983-84 - Held, yes - Whether, therefore, reassessments were time-barred - Held, yes FACTS For the assessment years 1981-82 to 1983-84, the original assessments of the assessee-HUF were duly completed. However, in September 1992, reassessment notices were issued and ultimately reassessment was made by valuing the property on the basis of valuation report obtained for the assessment year 1989-90 in the cases of properties held by the erstwhile members of the family in their hands, respectively. The Tribunal noticed that notices in respect of initiation of proceedings under section 17 were beyond the expiry of period of four years provided under section 17(1)(b) and barred by time. On appeal : HELD Under section 17 where there is no failure on the part of the assessee as envisaged under proviso to section 17(1), the limitation for initiating proceedings under section 17 is 4 years only from the end of the relevant assessment year. A comparative reading of section 17(1) as it now exists and as it existed before 1-4-1989 reveals that insofar as case falling under clause (b) of section 17(1) and proviso to new section 17(1) is concerned, there is no substantial difference. Under the previous provision cases where escapement of assessment was believed to be as a result of any failure on the part of the assessee in filing returns, or responding to notice or in disclosing…

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