Home Case Index All Cases Wealth-tax Wealth-tax + AT Wealth-tax - 2014 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (1) TMI 1928 - AT - Wealth-taxReopening of wealth tax assessment - Determining the taxable wealth - Wealth Tax assessment passed u/s 16(3) read with section 17 of the Wealth Tax Act - rational nexus between the “reasons” and the “belief” - Whether entire reopening of assessment beyond four years from the end of the assessment year in question was bad in law as there was no omission on the part of the appellant to disclose all material facts and in furnishing necessary information for completion of the assessment? - HELD THAT:- As seen from the order of AO even though the assessment was reopened to examine the transaction between M/s Satyam computers and assessee, no such exercise was undertaken and no findings were given on that issue. The additions made are on revaluation of property which was already revalued in original assessment and denial of exemption claimed on the reason that details were not filed. There is no nexus between the reasons recorded and additions made in the guise of escapement of wealth. We rely upon the decision of case of Ganga Saran & Sons P. Ltd. [1981 (4) TMI 5 - SUPREME COURT] for the proposition that if there is no rational nexus between the “reasons” and the “belief”, so that on such reasons the A.O. cannot have reason to believe that any part of the income of the assessee has escaped assessment and such escapement was by reason of omission or failure on the part of the assessee to disclose fully and truly all material facts, the notice issued by the A.O. is to be struck as invalid. We find that recording of reasons before the issue of notice under section 17 has absolutely no nexus with the assessment made. AO had no tangible material to come to the conclusion that there was escapement of income from the original assessment. The assessment made under sec. 16(3) has been wrongly reopened under sec. 17 beyond period of 4 years, as there is no failure on the part of the assessee to disclose fully and truly all the material facts in the original assessment itself. The reopening was on wrong foundation of reasoning of the financial implication between the assessee-company and M/s. Satyam Computer Services Limited, which was not established in the reassessment to justify the reopening. There being no nexus or live-link with the reasons recorded and the ‘formation of belief’ to come to a conclusion that there was escapement of income and also since the assessment has been reopened beyond the period of 4 years when there is no failure on the part of the assessee to fully and truly disclose all material facts in the original assessment itself, and there being ‘no tangible material’ for the reopening of the assessment, the CWT(A) erred in confirming the order of the Assessing Officer. We, therefore, hold that the reopening of the jurisdiction under section 17 is bad in law and is to be quashed. - Decided in favour of assessee.
|