Law:

Section:

Section 17 of the Wealth tax Act, 1957 - Reassessment - General - Assessment years 1957-58 to 1961-62 - During relevant accounting period assessee, who was a partner is a firm, made gifts of certain amount to his wife and claimed exemption - WTO allowed assessee's claim - Later on he issued a notice under section 17 for reopening of assessment by including said amount as property of assessee - Whether on facts, it could be said that assessee had disclosed truly and fully all material facts and, therefore, notice could not be treated as valid notice under section 17(1)(a) - Held, yes - Whether once ITO was of opinion that property should be exempted and later on he felt that he should not have exempted it, it could not be said to be a case of information received within meaning of section 17(1)(b) - Held, yes - Whether, therefore, reassessment was to be set aside - Held, yes FACTS The assessee was a partner in a firm. While he was being assessed for income-tax the amounts standing in the name of his wife were included as his own money and the interest realised on those amounts was included in his income. The assessee, however, filed his wealth-tax returns for all the years in question from 1957-58 to 1961-62 and in all the years he claimed exemption for the amount standing in the name of his wife. The WTO accepted this contention and did not include this amount in the wealth of the assessee. Later on, however, he gave a notice under section 17 for reopening of the assessment by including the said amount as property of the assessee. The assessee objected to the issue of the notice on ground that this amounted to mere change of opinion and the WTO could not reassess on that basis. The claim of the assessee was, however, rejected by the WTO. The Tribunal allowed the assessee's claim and set aside the assessments. On reference : HELD In the instant case it was not denied that the assessee had disclosed in his return this amount which was in the name of his wife. He had claimed an exemption on the ground that this money had been transferred to his wife by means of a gift. Therefore, it could not be said that the assessee had failed to disclose any fact. He disclosed…

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