1981 (12) TMI 72 - AT - Wealth-tax

Summary

Issues Involved:
1. Validity of the assessment.
2. Timeliness of the assessment.
3. Issuance of demand notices.
4. Annulment of the assessment by the AAC.
5. Service of notice to all legal heirs.
6. Application of mind by the WTO.
7. Assessment figures under section 16(5).
8. Additional grounds of appeal.

Detailed Analysis:

1. Validity of the Assessment:
The appellant argued that the assessment made was invalid and bad in law. This issue revolves around whether the assessments were framed in accordance with the Wealth-tax Act, 1957. The Tribunal concluded that the assessments were not in accordance with the law, specifically section 3 read with section 19A, as they were not framed on the executor of the Will of the deceased but on the legal heirs, which constitutes an illegality rather than a procedural irregularity.

2. Timeliness of the Assessment:
The appellant contended that there was no evidence that the assessment was made on the date mentioned in the assessment order and suggested that the assessment had become time-barred. The Tribunal did not find sufficient evidence from the department to counter this claim, thereby supporting the appellant's argument that the assessments were not timely.

3. Issuance of Demand Notices:
The appellant claimed there was no evidence that demand notices were issued on 24-3-1979. The Tribunal did not find any substantial evidence from the department to prove the issuance of demand notices on the specified date, thus supporting the appellant's claim.

4. Annulment of the Assessment by the AAC:
The AAC had set aside the assessments for all the assessment years involved and directed the WTO to make assessments de novo. The Tribunal agreed with the AAC's decision, emphasizing that the assessments were not framed in accordance with the law, thus justifying their annulment.

5. Service of Notice to All Legal Heirs:
The appellant argued that the notice under section 16(2) was not served on all legal heirs of the deceased. The Tribunal noted that the deceased had left a Will appointing an executor, and the assessments should have been framed on this executor. The failure to serve notice to all legal heirs, especially in light of the existence of an executor, was deemed a significant oversight.

6. Application of Mind by the WTO:
The appellant claimed that the WTO failed to apply his mind to the facts of the case and did not pass a speaking order. The Tribunal found that the assessments were not made in accordance with the legal requirements, indicating a lack of due consideration by the WTO.

7. Assessment Figures under Section 16(5):
The appellant argued that the assessment figures were arbitrarily high without any basis or jurisdiction. The Tribunal did not delve deeply into this issue as the assessments were annulled on broader legal grounds.

8. Additional Grounds of Appeal:
The appellant reserved the right to amend or file any additional grounds of appeal. The Tribunal found these grounds to be of academic interest and did not address them in detail, as the primary issues had already led to the annulment of the assessments.

Conclusion:
The Tribunal concluded that the assessments were not made in accordance with the law and annulled them. The impugned order of the AAC was ratified to the extent that the assessments were set aside. The Tribunal emphasized that the assessments should have been framed on the executor of the Will of the deceased, not on the legal heirs, thus constituting an illegality that vitiated the assessments. Other grounds raised by the appellant were deemed infructuous in light of the annulment.