Law:

Section:

Section 17 of the Wealth-tax Act, 1957 - Reassessment - General - Assessment years 1962-63 to 1966-67 - Petitioner assessee settled certain properties in favour of trust, beneficiaries of which were his wife and sons - Petitioner had filed nil wealth-tax returns and they were accepted - Before ITO, petitioner had conceded that income-tax in respect of income from property could be added to his income under section 16(3) of Indian Income-tax Act, 1922 - On that basis income tax was assessed against petitioner and refund was allowed to trustees in respect of income from trust properties - WTO, on basis of said information, initiated reassessment proceedings by issuing notice under section 17 on 29-8-1970 - Whether WTO had reason to believe in consequence of information in his possession that net wealth chargeable to tax had escaped assessment - Held, yes - Whether notice, in so far as assessment year 1966-67 was concerned, was valid one but other notices for assessment years 1962-63, 1963-64 and 1965-66 under section 17(1)(a) were barred and must be set aside - Held, yes FACTS The petitioner assessee settled certain properties in favour of a trust. Under the trust deed the wife and sons of the petitioner were the beneficiaries in respect of the income out of the trust properties. The petitioner also paid gift tax. After the settlement was executed, the petitioner did not file any return for the assessment years 1957-58 and 1958-59. On 16-2-1969 the WTO wrote to the petitioner to file a return under the Act. In response the petitioner filed a nil return and the WTO accepted the same. However, before the ITO the assessee conceded the point that income-tax in respect of the income of the property could be added to the income of the petitioner under section 16(3) of the Indian Income-tax Act, 1922. On that basis income-tax was assessed against the petitioner and refund was allowed to the trustees in respect of the income from the trust properties. This information was passed on to the WTO who on the basis of the said information, initiated the proceedings under section 17. The notice was issued on 29-8-1970 whereby the petitioner was called upon to submit return of…

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