TMI Blog1980 (1) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... the owner of plot No. 147 for all the three assessment years in question and another plot, No. 1939A, was purchased after the valuation date relevant to the assessment year 1971-72 was passed and we are concerned with plot No. 1939A only for the assessment years 1972-73 and 1973-74. For each of these three years the assessee, the petitioner herein, had submitted wealth-tax returns and along with the wealth-tax returns for each of the three assessment years, valuation reports of a registered and approved valuer, who is approved by the Government of India, was submitted to the WTO. The returns were accepted by the WTO and assessment orders were passed in respect of each of these three years. Thereafter, notices under s. 17 of the W.T. Act we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Act. However, when the notices were challenged and the writ petition was admitted, in the affidavit-in-reply by the WTO, in paragraph 6, it has been stated that it had come to the notice of the WTO that the prevailing market value of the land in the area was Rs. 45 per square yard and on this basis the matter was sought to be reopened. In paragraph 11 it has been stated that the challenge of the petitioner was misconceived inasmuch as the respondent had invoked the provisions of s. 17(1)(b) of the W.T. Act and not s. 17(1)(a) as was contended. The WTO came to know the under-statement of valuation only through the means of audit objections and in the course of assessment proceedings. The information thus being available after completing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment or assessment at too low a rate or otherwise under s. 17(1)(b) within four years of the end of the assessment year in question. Though in the impugned notices and the reasons which accompany the impugned notices the reason to believe was under s. 17(1)(a), ultimately when it comes to the affidavit-in-reply, the respondent-WTO seeks to rely on s. 17(1)(b) and seeks to say that because he had information that another plot in the area, namely, Krishnanagar, where the two plots Nos. 147 and 1939A are located, was worth Rs. 45, he had reason to believe from such information as derived from the other assesment that the net wealth chargeable to tax had escaped assessment for that particular year, whether by reason of under-assessment or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16(1)(b) has already been adverted to earlier. Accordingly, 'information' means instructive knowledge concerning a matter bearing on the assessment received from an external source after the completion of the original assessment. The 'information' may be as to the correct state of facts or of law relating to taxable gift and it must be capable of arousing or suggesting ideas or notions not existent before in the mind of the recipient. In other words, it must be of such a nature as to acquaint, enlighten or instruct the mind of the Gift-tax Officer for the first time concerning a matter pertaining to the taxable gift so that he could form a reasonable belief that there has been an escapement of tax which requires to be set right by taking s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve escaped assessment, would not, in our opinion, constitute 'information'." The language of s. 16(1)(b) of the G.T. Act is identical with and in pari materia with the language of s. 17(1)(b) of the W.T. Act and what has been stated in the context of gift-tax would apply with equal force in the context of the W.T. Act. In ITO v. Lakhmani Mewal Das [1976] 103 ITR 437, the Supreme Court was concerned with a notice under s. 147 of the I.T. Act and Khanna J., speaking for the Supreme Court, has pointed out at page 448 of the report : " The powers of the Income-tax Officer to reopen assessment, though wide, are not plenary. The words of the statute are 'reason to believe' and not 'reason to suspect'. The reopening of the assessment after t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and reasonable person based upon reasonable grounds and that the Income-tax Officer may act on direct or circumstantial evidence but not on mere suspicion, gossip or rumour. The Income-tax Officer would be acting without jurisdiction if the reason for his belief that the conditions are satisfied does not exist or is not material or relevant to the belief required by the section. The court can always examine this aspect though the declaration or sufficiency of the reasons for the belief cannot be investigated by the court." In the instant case, in the first instance, there is this difference between the reasons for issuing of the notices for reopening of assessment and the affidavit-in-reply. The reason proceeded on the footing of s. 17( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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