- (1.) Leave granted. Heard counsel for both the parties.
(2.) This appeal arises from the judgment of the Himachal Pradesh High court answering the question referred to it, at the instance of the Revenue, in favour of the Revenue. The question stated under Section 27 (1 of the Wealth Tax Act, 1957 reads: "Whether the Income Tax Appellate tribunal has been right in law in vacating the orders passed by the Commissioner of Wealth Tax under Section 25 (2 of the Wealth Tax Act, 1957, for the Assessment Years 1959- 60 to 1967-68 on the ground that on his own recorded findings, the Commissioner wrongly assumed jurisdiction. "
(3.) For the Assessment Years 1959-60 to 1967-68, the appellant-assessee filed returns on 30/8/1969 declaring the value of his house property at Rs. 5,02,762. 00. Since the returns were filed beyond the prescribed period, the Wealth Tax Officer issued notices under Section 18 (l) (a) of the Act. The assessee filed revised returns disclosing higher valuation which were accepted by the Wealth Tax Officer. He made an assessment order accordingly, stating, inter alia, that the assessment was made under Section 16 (3. When these orders came to the notice of the Commissioner of Wealth Tax, he proposed to revise them under Section 25 (2 of the Act. He issued notices calling upon the assessee to show cause why the said orders of assessment be not revised for two reasons, viz. , (0 the Wealth Tax Officer did not apply his mind to the valuation, etc. as he did not give a notice under Section 16 (2 of the Act and yet completed the assessment under Section 16 (3 which is as such invalid and (ii) the Wealth Tax Officer erred in accepting the value of the house property for all the said assessment years at a lower figure, even though value of the very same house property was declared by the assessee in the return relating to Assessment Year 1968-69 at a much higher figure. The assessee submitted explanation to the said show-cause notice staling that non-issuance of notice under Section 16 (2 of the Act is a mere irregularity and not an illegality and that inasmuch as his revised returns have been accepted by the Wealth Tax Officer, the non-issuance of the notice under Section 16 (2 is neither erroneous nor prejudicial to the interests of the Revenue. After hearing the assessee, the Commissioner revised the aforesaid assessment orders. The main reason assigned by him is to be found in Para 3 of his order, which reads: "I have carefully considered the various points made by the assessee in its note dated 27/9/1974 as well as those made during the course of hearings. According to me there is no force in the submissions of the assessee. No assessment can validly be made under Section 16 (3 without issuing a notice under Section 16 (2. Such an assessment can always be challenged by the assessee legally, even after the period for reopening the assessment under Section- 17 of the Wealth Tax Act is over. And if this happens, the Department would have no remedy for collecting the wealth tax dues from the assessee for this year as it will be outside its purview. Therefore, the assessment order made by the Wealth Tax Officer is not only erroneous but also prejudicial to the interests of the Revenue. ";