Law: Wealth Tax Act, 1957

Section: 27(1),16A,17(1)(b)

Law: Income Tax Act, 1961

Section: 147(a)

Wealth tax--- ----Reassessment---Valuation of assets---Firm---Partner---Assessment of partners completed---Reference to registered value for valuing property belonging to firm---Not valid---Reassessment of partners based on valuation of assets of firm by registered value ---Not valid---Indian Wealth Tax Act, 1957, Ss. 16-A & 17(1)(b). Reference to the Valuation Officer in respect of the assets of a firm for ascertaining the value of the partner's interest is permissible but that power can be exercised if the assessment is pending. Where no proceedings are pending before the Wealth Tax Officer, no reference to the Valuation Officer can be made under section 16A of the Wealth Tax Act, 1957. Section 17(1)(b) of the Wealth Tax Act, 1957, is applicable if the Wealth Tax Officer has, in consequence of any information in his possession, reason to believe notwithstanding that there has been no such omission or failure as is referred to in clause (a) that the net wealth chargeable to tax has escaped assessment for any year, whether by reason of under assessment or assessment at too low a rate or otherwise and he may proceed to assess or reassess. This provision makes it clear that there should be information "and reason to believe" for the exercise of such power. If there is no information as contemplated by section 17(1)(b) then there could not be a valid initiation of proceedings. Held, on the facts, that since assessments of the partners/ assessees had already been completed, the reference by the Wealth Tax Officer under section 16-A for valuing the property of the firm in respect of a cinema could not have given any right to reopen the completed assessment of the partners. The Tribunal was justified in holding that the Wealth Tax Officer did not have jurisdiction to initiate reassessment proceedings against the partners. CWT v. Master Kairas'Tarapore (1987) 163. 1TR 311 (Raj); Sardar Kehar Singh v. CIT (1992) 195 ITR 769 (Raj) and Tulsidas Kilachand v. D.R. Chawla (1980) 122 ITR 458 (Boom) fol. Amrut Talkies v. ITO (Second) (1984) 150 ITR 386 (Kar).; Brig. B. Lall v. WTO (1981) 127 ITR 308 (Raj.) and Nawal Kanwar (Smt.) v. WTO (1981) 127 ITR 308 (Raj) ref.…

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