Law: Wealth Tax Act, 1957

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

(a) Wealth tax--- ----Reassessment---Law applicable---Effect of amendment of S.17 w.e.f. 1-4-1989---Condition precedent for initiation of reassessment proceedings--­Assessing Officer should have reason to believe that a property has escaped assessment whether by reason of under assessment or assessment at too low a rate or otherwise ---Assessee himself giving higher valuation of property in subsequent years ---Rea-asessment proceedings were valid---Indian Wealth Tax Act, 1957, S.17. (b) Wealth tax--- ---Reassessment---Limitation---Law applicable---Effect of amendment of S.1'7 w.e.f. 1-4-1989---Period of limitation is now linked to amount of wealth which has escaped assessment---Indian Wealth Tax Act, 1957, S.17. (c) Wealth tax--- ---- Valuation of assets---Reference to Valuation Officer after issuing notice of reassessment---Reference was valid---Indian Wealth Tax Act, 1957, S. 16A. Section 17 of the Wealth Tax Act, 1957, has undergone a change with effect from April 1, 1989, under the Direct Tax Laws (Amendment) Act, 1987. After the amendment all that is necessary is that the Assessing Officer should have reason to believe that a property has escaped assessment, whether by reason of underassessment or assessment at too low a rate or otherwise. The word "otherwise" has to be given some meaning and it is not possible to contemplate or limit the circumstances under which an assessment can be reopened, because the property has not been correctly valued. All that can be said is that an Assessing Officer should not exercise the power arbitrarily or in a mala fide manner. So long as the Assessing Officer has some reason to believe that the property has escaped proper assessment, he can always exercise the power, provided lie does so within the period of limitation. The period of limitation is now linked to "the net wealth chargeable to tax, which had escaped assessment". The appellant owned immovable properties. He had been filing voluntary returns under section 14(1) which were accepted by the Wealth Tax Officer. For the assessment year 1984-85, the appellant disclosed a net wealth of Rs.3,17,800. For the assessment year 1985-86, the assessee disclosed a net wealth…

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