TMI Blog1971 (11) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act "). The Wealth-tax Act, 1957, came into force from the first day of April, 1957. The assessment year 1957-58 was thus the first assessment year under the Act. The Wealth-tax Officer issued notices under section 14(2) of the Act in the names of Shri Ridhkaran Bengani, Shri Munnalal Bengani and Shri Prithviraj Bengani of Bidasar for filing their wealth-tax returns. The notices did not specify whether they were to submit wealth-tax returns in respect of the properties belonging to them individually or whether they were to submit wealth-tax returns in respect of the property owned by their Hindu undivided families. However, in response to the notices, the returns were submitted by them as kartas of their Hindu undivided families. The Wealth-tax Officer held the status of the assessees as that of " individual " and completed the assessment against the kartas under section 16(3) of the Act. All the three of them appealed and the Appellate Assistant Commissioner upheld the assessments against the kartas in the status of " individual ". The assessees went in appeal before the Appellate Tribunal and it was contended on their behalf that as the notice under section 14(2) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of his net wealth or the net wealth of any other person, then, notwithstanding anything contained in sub-section (1), he may serve a notice upon such person requiring him to furnish within such period, not less than thirty days, as may be specified in the notice, a return in the prescribed form and verified in the prescribed manner, the net wealth of such person as on the valuation date mentioned in the notice. Section 15 of the Act enables a person who has not furnished his return within the time allowed under section 14 or having furnished the return under that section discovers any omission or a wrong statement therein, he may furnish a return or a revised return as the case may be at any time before the assessment is made. These two sections deal with the filing of returns. In the scheme of the Act, the assessment is made under section 16 of the Act Section 16(1) empowers the Wealth-tax Officer to assess the net wealth of the assessee and determine the amount of wealth-tax payable by him or the amount refundable to him on the basis of his return if he is satisfied that the return filed by him under section 14 or section 15 does not require the presence of the assessee or produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... representing their Hindu undivided families. The returns before the Wealth-tax Officer were on behalf of the Hindu undivided family and there was no return by them in the status of " individual ". It was not therefore open to the Wealth-tax Officer to complete the assessment under section 16(3) of the Act of the kartas representing their Hindu undivided families in the status of " individual ". As already noticed, assessment under section 16(3) contemplates filing of the return by the assessee. The status of " individual " and " Hindu undivided family " are separate units. We therefore agree with the Tribunal that in completing the assessments against the kartas in their " individual " status without issuing a fresh notice to them under section 14(2) to file the returns, the Wealth-tax Officer exceeded his jurisdiction under section 16 of the Act. The Wealth-tax Officer has, in assessing the kartas in their " individual " status while they had filed the returns as " Hindu undivided family ", acted contrary to section 16(3) as it to assess them as a different unit and without the return in the status as " individual ". Mr. Lodha on behalf of the department contends that, as the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice does not specify the status, it is for the person filing the return to indicate his status in which he files the return. So far as the notice in this case was concerned, it was addressed to the firm and there was no defect in holding that it was meant for the assessee as a firm. This case does not help the department. Commissioner of Income-tax v. Swaminathan Chettiar : In this case, the assessee, the karta of a joint Hindu family, was assessed for the assessment year 1939-40 as the karta of the family and also in his individual capacity. In the assessment year 1940-41 the assessee put forward a claim under section 25A of the Income-tax Act that on 21st January, 1940, a partition had taken place among the members of the family. The Income-tax Officer rejected the claim, but the Appellate Assistant Commissioner by his order dated 17th August, 1942, accepted it and directed an assessment to be made on that basis. Meanwhile, the Income-tax Officer discovered that the family's income for the assessment year 1939-40 had been assessed at too low a rate and he, therefore, issued, on 6th July, 1942, a notice under section 34 stating, inter alia, that " your income" for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s disputed. It was held on the facts of the case that the notice issued to A under section 34 was not bad in law. It was, however, observed that it would have been better if the Income-tax Officer had indicated in that notice that it was being served on A as the principal officer of an association of individuals consisting of himself and B, C and D, but the facts of the previous assessment having been mentioned, A could have in his mind no doubt as to the status in which the notice was being served on him. It was also held that the Income-tax Officer could not in the reassessment proceedings of A, B, C and D assess an entirely new association of individuals of E and F. The facts of this case are entirely distinguishable and do not help the department. Learned counsel for the assessee invited our attention to a decision of the Supreme Court in Commissioner of Income-tax v. K. Adinarayana Murthy. In this case the respondent was a Hindu undivided family. Subsequent to the original assessment, the Income-tax Officer had known information that the respondent had done some procurement business and earned large profits which had escaped assessment for the assessment year 1949-50. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X
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