By C. N. Vaze, Shailesh Kamdar, Jagdish T. Punjabi, Chartered Accountants
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26 (2008) 303 ITR (AT) 145
C. K. Govindankutty Nair v. WTO
A.Ys. : 1989-90 to 1991-92. Dated : 31-5-2006
Where the original assessment has been completed u/s.16(3),
whether reassessment can be done after expiry of 4 years from the end of
assessment year without assessee’s failure to disclose facts — Held, No.
For A.Y. 1989-90, the assessee has adopted a particular value
of land (with area of 40 cents) and building for determining value of his
interest in the firm. Subsequently he filed a revised return to avail the
benefit of valuation under Schedule III read with S. 7(2) and declared a much
lower value of the said land and building. The Assessing Officer accepted such
lower valuations. The said firm was dissolved in 1986 and the Assessing Officer
held that assessee’s share — 10.580 cents of land and building was distinctly
identifiable and hence valuation of entire plot of 40 cents and building as one
unit resulted in escapement of wealth. The Assessing Officer initiated
reassessment u/s.17 which was upheld by the Commissioner (Appeals).
On further appeal by the assessee, the ITAT held that :
1. S. 17 of the Wealth Tax Act is analogous to S. 147 of
the Income-tax Act.
2. Once assessment is completed u/s.16(3) of the Act, no
action can be taken by the Assessing Officer after the expiry of 4 years from
the end of the assessment year, unless
(a) there is a failure on the part of the assessee to
make a return under S. 14 or S. 15 or in response to a notice U/ss.(4) of S.
16 or S. 17(1); or
(b) the assessee fails to disclose fully and truly all
material facts necessary for his assessment.
3. A perusal of the assessment order clearly showed that
the fact of dissolution of the firm and the method of valuation was duly
disclosed before the Assessing Officer and he has applied his mind on the said
facts at the time of framing the original assessment.
4. Reassessment cannot be initiated on mere change of
opinion of the Assessing Officer. Therefore the reassessment proceedings
initiated by the Assessing Officer u/s.17 of the Act need to be cancelled.
Case relied upon :
(i) CIT v. Foramer France, (2003) 264 ITR 566 (SC)
