Reassessment: Section 17 of W. T. Act, 1957: Notice in the name of person who did not exist i.e. a company which is wound up and amalgamated with another company: Notice and subsequent proceedings not valid.

A company AP was wound up by virtue of the order of the company court and was amalgamated with the assessee company w.e.f. 01-04-1995. On 20-01-1997, the Assessing Officer issued notice u/s. 17 of the Wealth-tax Act, 1957 on AP directing it to file its wealth tax return in respect of a period prior to 01-04-1995 i.e. prior to amalgamation. Pursuant to the notice, reassessment order was passed. The notice and the reassessment was upheld by the Commissioner (Appeals) and the Tribunal.

On appeal by the assessee, the Calcutta High Court reversed the decision of the Tribunal and held as under:

“i) Section 17 of the Wealth-tax Act, 1957, is similar to the provisions contained in section 148 of the Income-tax Act, 1961, and section 34 of the Indian Income-tax Act, 1922. The jurisdiction to reopen a proceeding depends upon issue of a valid notice under the provisions, which gives power to the Assessing Officer to reopen a proceeding. A notice to a person who is not in existence at the time of issuing such notice is not valid. The fact that the real assessee subsequently filed its return with the objection that such notice is invalid and cannot cure the defects which go to the root of the jurisdiction to reopen the proceedings.

ii) The authorities below totally overlooked the fact that initiation of the proceedings for reassessment was vitiated for not giving notice u/s. 17 of the Act to the assessee and the notice issued upon AP which was not in existence at that time, was insufficient to initiate proceedings against the assessee which had taken over the liability of AP prior to the issue of such notice.

iii) Reassessment proceedings were not valid and were liable to be quashed.”