TMI Blog2008 (4) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... section 16A(4) and (5), it is clear that the report is submitted after giving an opportunity to the assessee who also was entitled to lead this evidence before the valuation officer, before he proceeds to value the property. Such a document will have to be treated as information giving rise to reason to believe that wealth has escaped assessment. - 188 with 174, 195, 163 and 196 of 2004 - - - Dated:- 7-4-2008 - F. I REBELLO, R. S. MOHITE JJ. A. S. Rao with P. S. Sahadevan for the appellant. A. K. Jasani with S. N. Inamdar for the respondent. JUDGMENT The judgment of the court was delivered by 1. F. I. Rebello J.-All these appeals are being disposed of by this common order as the questions of law in issue are the same. The question of law as framed on behalf of the Revenue reads as under : "Whether on the facts and in the circumstances of the case and in law, the hon'ble Income-tax Appellate Tribunal was justified in holding that the Assessing Officer was not justified in reopening the assessment on the basis of the valuation report obtained by him sub-sequent to the date of completion of assessment ?" 2. The learned Income-tax Appellate Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was called for before the order of assessment but was received sub-sequent to the order of assessment. 7. W. T. A. No. 196 of 2004 is for the assessment year 1992-93. The return of wealth was filed on December 31, 1992 and the same was processed under section 16(1) of the Wealth-tax Act, 1957. The assessment under section 16(1) was completed on November 8, 1994. The report from the DVO was called on November 9, 1993. The DVO's report was received subsequently. Notice under section 17(1) was thereafter issued. 8. Thus, for the assessment years 1990-91, 1991-92 and 1992-93 the report was called from the DVO during the pendency of the proceedings before the Wealth-tax Officer. The report was received subsequently to the order passed by the Wealth-tax Officer. 9. In so far as the assessment years 1988-89 and 1989-90 the report was called subsequent to the order of assessment by the Wealth-tax Officer. 10. To answer the question, therefore, we will have to answer the following issues : "(1) Was it open to the Assessing Officer to issue notice under section 17 for reopening of assessment based on the report of the DVO which was called for after the assessment order was passed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch person a notice requiring him to furnish within such period, as may be specified in the notice, a return in the prescribed form and verified in the prescribed manner setting forth the net wealth in respect of which such person is assessable as on the valuation date mentioned in the notice, along with such other particulars as may be required by the notice, and may proceed to assess or reassess such net wealth and also any other net wealth chargeable to tax in respect of which such person is assessable, which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section for the assessment year concerned (hereafter in this section referred to as the relevant assessment year), and the provisions of this Act shall, so far as may be, apply as if the return were a return required to be furnished under section 14 : Provided that where an assessment under sub-section (3) of section 16 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any net wealth chargeable to tax has escaped assessment f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... send a copy to the Assessing Officer and to the assessee. The Wealth-tax Officer, concerned, has to proceed to com-plete the assessment in conformity with the estimate of the Valuation Officer. Section 16A(3) sets out that if the Valuation Officer is satisfied that the valuation of the asset as it has been correctly declared in the return, he shall pass order in writing to that effect and send a copy of the order to the Wealth-tax Officer and to the assessee. Under section 16A(4), where the Valuation Officer is of the opinion that the valuation of the asset is higher than the value declared in the return made by the assessee under section 14 or section 15, or where the asset is not disclosed or the value of the asset is not declared in such return or where no such return has been made, the Valuation Officer shall serve a notice on the assessee intimating the value which he proposes to estimate and giving the assessee an opportunity to state, on a date to be specified in the notice, his objections either in person or in writing before the Valuation Officer and to produce or cause to be produced on that date such evidence as the assessee may rely in support of his objections. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment is finalised and that it is not permissible to make reference to the Valuation Officer after it is already finalized. The petition was partly allowed. The Valuation Officer was permitted to proceed to valuate for the assessment years where the orders had not been passed. This judgment was followed by another learned single judge in Shantilal Bhogilal Jhaveri v. C. L. Bha-tia, Fifth WTO [1991] 187 ITR 395 (Bom). 19. In Smt. Uma Debi Jhawar v. WTO [1982] 136 ITR 662 (Cal) the learned single judge of the Calcutta High Court again was dealing with the issue whether the report had been called from the DVO after the assessments has been completed. The learned judge noted the intent and/or purpose for which section 16A was introduced and held that section 16A had no relevance and cannot be applied after the assessment is completed and before reassessment is commenced and that the report of the Valuation Officer under section 16A can neither constitute information within the meaning of section 17(1)(b) nor provide a reason for the belief that income had escaped assessment due to the assessee's failure to disclose material facts under section 17(1)(a). 20. In CWT v. Ravi Cheloo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the assessment proceedings were completed, the Wealth-tax Officer cannot call for the order of the Valuation Officer. A valuation order subsequently received but called when proceedings were pending can be used as piece of information by the Wealth-tax Officer and it certainly enable the Wealth-tax Officer to commence reassessment proceedings under section 17(1)(b). 24. In Dr. Karni Singh Ji of Bikaner (Decd.) v. Deputy CIT [1999] 237 ITR 505, the Delhi High Court was considering the case where report was called for during the pendency of the proceedings. The report was received after the assessment order was passed, but the report was considered for issuing notice for reassessment under section 17(1)(b). The learned Division Bench held that the proceedings for reassessment based on the said report were valid. 25. In Brig B. Lall v. WTO [1981] 127 ITR 308 (Raj) the learned Division Bench of the Rajasthan High Court took a view that reference to Valuation Officer cannot be made where assessment is completed and the said report cannot be formed basis for reassessment proceedings. 26. From the provisions of the Act and the judgments which have been set out earlier what emerges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before he proceeds to value the property. Such a document will have to be treated as information giving rise to reason to believe that the wealth has escaped assessment. 29. In our opinion, therefore, in cases where the report was called for during the pendency of the proceedings but was received subsequent to the completion of assessment the law would be that such report/order can be the basis for issuing notice for reopening the assessment under section 17(1) of the Wealth-tax Act, 1957. 30. Having stated the law, we may now proceed to dispose of the appeals. 31. In so far as Wealth-tax Appeal No. 188 of 2004 for the assessment year 1988-89 and Wealth-tax Appeal No. 174 of 2004 for the assessment year 1989-90, the report was called for after the assessment was completed and in these circumstances, both the appeals preferred by the Revenue will have to be dismissed and are accordingly dismissed. 32. Wealth-tax Appeal No. 195 of 2004 the assessment was made under section 16(3) for the assessment year 1990-91. The assessment was completed on March 31, 1994. The report was called for as noted earlier before the assessment order could be completed on January 9, 1993. The lear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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