Law: Wealth Tax Act, 1957

Section: 17,16,14

Law: Income Tax Act, 1961

Section: 147(a),148,139

Wealth tax------Reassessment---Condition precedent---Reason to believe that wealth had escaped assessment ---WTO must have material for such belief---Assessee submitting returns and giving details regarding foreign shares and stocks--­Original assessment based on return---Reassessment on the ground that foreign shares and stocks had been undervalued---No new information regarding foreign shares and stocks---Reassessment proceedings were not valid---Indian Wealth Tax Act, 1957, S.17---Constitution of India, Art.226. In order to initiate proceedings for reassessment under section 17(1)(a) of the Wealth Tax Act, 1957, the Wealth Tax Officer must form an opinion that by reason of the omission or failure on the part of the person to make the return under section 14, or for non-disclosure of full and true material facts necessary for assessment of his net wealth, the net wealth chargeable to tax has escaped assessment for that year. For attraction of clause (b) of section 17(1) 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, he may issue notice within four years of the end of that assessment year containing all or any of the requirements which may be included in a notice under subsection (2) of section 14 and may proceed to assess or reassess such net wealth. According to section 14 every person whose net wealth is of such an amount which renders him liable to wealth tax under the Act shall furnish to the Wealth Tax Officer a return in the prescribed form. Such details are required to be given by such assessee. The assessment order passed under section 16 is not an empty formality. It is a final order which advised the assessee that for the purposes of the Act, he has been assessed and no further action is required to be taken. Section 17 is an exception to the finality of the assessment order passed under section 16. What is required to become final cannot easily…

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