Law:

Section:

Section 17, read with section 16(3), of the Wealth-tax Act, 1957 - Income escaping assessment - General - Assessment year 1997-98 - Whether when a notice for re-assessment is issued, assessee is required to file return and seek reasons for issuance of notice and Assessing Officer is bound to supply reasons whereupon assessee is entitled to file preliminary objections and Assessing Officer is under a mandate to dispose of such preliminary objection by passing a speaking order before proceeding with assessment - Held, yes FACTS The petitioner-company filed its return of net wealth for the assessment year 1997-98. After scrutiny of the said return the Assessing Officer passed an order under section 16(3). Due to a query raised by the audit party the Assessing Officer called for an explanation from the petitioner which was duly submitted by the petitioner. However, the Assessing Officer issued a notice under section 17 for initiating the re-assessment proceeding and on the petitioner's request, supplied the reasons recorded by him in response to which the petitioner filed preliminary objections. The petitioner had then filed a writ petition in which the High Court directed the Assessing Officer to dispose of the said objections by passing a speaking order. In the meantime the Assessing Officer passed the re-assessment order and served the same on the petitioner. The petitioner's rectification application under section 35 requesting the Assessing Officer to withdraw the reassessment order in the light of the High Court's order also elicited no response. On writ petition, the petitioner contended that as the re-assessment order was passed by ignoring the order of the Supreme Court in the case of G.K.N. Driveshafts (India) Ltd. v.ITO [2003] 259 ITR 19/[2002] 125 Taxman 963 as well as the order of the High Court in the earlier petition filed by the petitioner, the impugned notice and the re-assessment order were required to be held to be without jurisdiction. HELD The position in law is well settled that after a notice for re-assessment has been issued, an assessee is required to file the return and seek reasons for issuance of such notice. The Assessing Officer is…

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