Law: Wealth Tax Act, 1957

Section: 14(2),16(5),17(1)

Law: Income Tax Act, 1961

Section: 147(a),148,139

Wealth tax--- ----Reassessment---Failure to disclose material facts necessary for assessment---Duty of assessee is to disclose primary facts---Failure to furnish return for assessment year 1971-72---Best assessment on the basis of details furnished in respect of assessment year 1969-70---Finding that there was no failure to disclose material facts in assessment year 1969-70---Reassessment not valid---Indian Wealth Tax Act, 1957, S.17(1)(a). The obligation of the assessee is to disclose only primary facts and not inferential facts. What facts are material would depend upon the facts and circumstances of each case and there must be escapement of tax or under assessment due to such failure or omission. For the assessment year 1971-72, the assessee had failed to file a return in response to the notice under section 14(2) of the Wealth Tax Act, 1957, whereupon the Wealth Tax Officer completed the assessment ex parte under section 16(5). In the best, assessment, he estimated the net wealth of the assessee at Rs.3,00,000 Subsequently, the assessment was reopened under section 17(1) (a) since, according to the assessing authority, the wealth chargeable to tax had escaped assessment on account of failure on the part of the assessee to file the return. The Tribunal found that, while completing the original assessment ex parte under section 16(5), the Wealth Tax Officer had been guided by the details of the properties furnished by the assessee in respect of the assessment for the earlier assessment year 1969-70. The Tribunal further noted that there was no failure on the part of the assessee to disclose any of his properties in respect of the assessment year 1969-70. The Tribunal, therefore, came to the conclusion that the reopening of the assessment for the relevant assessment year would not be justified merely on the ground that the assessee had failed to furnish his return of wealth for the year. On a reference: Held, that the assessment had been reopened on the basis of two letters of another Income Tax Officer disputing the value of the properties. The details of the property as disclosed by the assessee in his returns for the earlier years were available to the…

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