TMI Blog2004 (9) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of the court was delivered by R.K. Agrawal J.- The Income-tax Appellate Tribunal, Allahabad, has referred the following questions of law under section 27(1) of the Wealth-tax Act, 1957 (hereinafter referred to as "the Act") for the opinion to this court: "1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally correct in holding that the provisions of section 17 and not the provisions of section 35 of the Wealth-tax Act, 1957 were applicable to the case? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally correct in holding that the assets other than jewellery could be revalued in the course of the respondent assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was Rs. 4,16,910 in the reassessment the net wealth was determined at Rs. 14,91,951. The assessee went in appeal to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner, while upholding the reopening of the assessment, held that since the assessment was reopened because of the exclusion of the value of jewellery from the assessee's net wealth at the time of the original assessment, the Wealth-tax Officer was not justified in proceeding to make a fresh assessment by revising the value of assets from what was taken in the original assessment on the basis of the report of the Valuation Officer for subsequent years by projecting it backwards to arrive at their value for the year under appeal, since this was a mere chang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the applicant submitted that as a result of the legal fiction incorporated with retrospective operation and the amendment of section 5(1)(viii) of the Act by the Finance (No. 2) Act, 1971, with effect from April 1, 1963, the omission of the value of the jewellery from the net wealth of the applicant was a mistake apparent from the record which could only be rectified by having recourse to the proceedings under section 35 of the Act and not under section 17 of the Act. He relied upon the following decisions: (i) IAC of Agrl. IT and ST v. V. M. Ravi Namboodiripad [1974] 96 ITR 73 (SC); (ii) Indian and Eastern Newspaper Society v. CIT [1979] 119 ITR 996 (SC); and (iii) CWT v. Sheela Devi Goel [1981] 132 ITR 517 (All). Sri Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med to have wrongly allowed and, thus, a case of wealth having escaped the assessment to tax under section 17 of the Act would arise. It is well settled that the circumstances under which an order under section 147 and an order under section 154 of the Income-tax Act, 1961, analogous to sections 17 and 35 of the Act, can be passed, are not mutually exclusive and may overlap. There is no conflict between the two sections so as to suggest that the provisions of one section will not apply where the provisions of the other section are applicable as held in Hira Lal Sutwala v. CIT [1965] 56 ITR 339 (All); Mrs. Gladys S. Koder v. ITO [1976] 104 ITR 220 (Ker); Sirsa Industries v. CIT [1984] 147 ITR 238 (P H); Indra Singh and Sons Pvt. Ltd. v. Unio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of an audit party on a point of law could not be regarded as information enabling the Income-tax Officer to initiate reassessment proceeding under section 147(b) of the Income-tax Act. In the case of Sheela Devi Goel [1981] 132 ITR 517 this court has upheld the action of the Wealth-tax Officer under section 35 of the Act for rectification of the assessment order consequent upon the retrospective amendment of section 5(1)(viii) of the Act, by the Finance (No. 2) Act, 1971. This court had not considered the question as to whether the provision of section 17 of the Act is also attracted or not. As already mentioned hereinbefore, as a result of the retrospective amendment in section 5(1)(viii) of the Act, the exemption on jewellery was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pay tax a notice containing all or any of the requirements which may be included in a notice under section 22(2) and may proceed to assess or reassess such income, profits or gains. It is, therefore, manifest that once assessment is reopened by issuing a notice under sub-section (2) of section 22 the previous underassessment is set aside and the whole assessment proceedings start afresh. When once valid proceedings are started under section 34(1)(b) the Income-tax Officer had not only the jurisdiction but it was his duty to levy tax on the entire income that had escaped assessment during that year." A Full Bench of the Bombay High Court in the case of CIT v. Indian Rare Earth Ltd. [1990] 181 ITR 22, has held that once a valid proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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