Law: Wealth Tax Act, 1957

Section: 27(1)

Law: Income Tax Act, 1961

Section: 263

Wealth tax-----Revision---Powers of CWT ---Assessment order completed without inquiry---Order is erroneous and prejudicial to revenue---CWT can revise such an order---Indian Wealth Tax Act, 1957, S.25. Where the assessment is completed without any enquiry whatsoever, the order of assessment is erroneous and prejudicial to the interests of the Revenue. While exercising powers to revise such assessment, the Commissioner may make further enquiry before cancelling the original order and he can rely on the result of such enquiry. For the assessment year 1976-77, the assessment records of the assessee were inspected by the audit party after completion of the regular assessment. An objection was raised that the fair market value of the property on the relevant valuation date worked out at Rs. 20,26,371 as against Rs. 7,44,400 returned by the assessee and accepted by the Assessing Officer. On receipt of such audit objections, the valuation of the property with referred to the Valuation Officer who determined the fair market value of the property on the relevant date at Rs. 14,18,000. On the basis of the aforesaid material, the Commissioner initiated proceedings under section 25(2) of the Act and finally directed the Wealth Tax Officer to take the fair market value of the assessee's property in New Delhi, at Rs.14,18,000 as against Rs. 7,44,400. The Tribunal held that the Commissioner of Wealth Tax did not have jurisdiction to make the order. On a reference: Held, that the order of the Commissioner of Wealth Tax was valid. CWT v. Nageswara Rao (A.) (1998) 231 ITR 215 (AP); CWT v. Ramnarayan Bhojnagarwala 1,1992) 194 ITR 489 (Cal.); Ganga Properties v. ITO (1979) 118 ITR 447 (Cal.); Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83 (SC); Rampyari Devi Saraogi v. CIT (1968) 67 ITR 84 (SC) and Tara Devi Aggarwal (Sint.) v. CIT (1973) 88 ITR 323 (SC) ref. JUDGMENT ARIJIT PASAYAT, C.J.---Accepting the pray for reference made under section 27(l) of the Wealth Tax Act, 19'77 (for short "the Act"), the Income-tax Appellate Tribunal, Delhi Bench C (for short "the Tribunal"), has referred the following question for the opinion of this Court: "Whether on the facts and in the…

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