- (1.) The department is aggrieved of the order dated 29-5-1981 of the learned Commissioner of Income Tax (Appeals), Kanpur.
(2.) The question involved relates to the validity of the reopening of the wealth-tax assessment of the assessee. The assessment year in question is 1964-65 for which the relevant valuation date was 15-11-1963. The original assessment was made under section 16(3) of the Wealth-tax Act, 1957 (the Act), on 22-3-1965 on a valuation of Rs. 75,013 as declared by the assessee-HUF Sadi Ram Ganga Prasad, Kanpur as per book value. However, for the assessment year 1968-69, the assessee declared a value of Rs. 4,18,246 on the basis of the report dated 19-2-1969 of the approved valuer Shri B. P. Agarwal, as on 31-12-1967. As per the details filed in the return for the assessment year 1968-69 as also the valuers report, the new construction was of Rs. 62,131 (Rs. 50,295 plus Rs. 11,836). On the basis of the following reasons recorded, the WTO reopened the assessment under section 17(1)(a) of the Act, on the basis that the net wealth chargeable to tax had escaped assessment by reasons of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment : The assessments under the Wealth-tax Act have already been completed in this case for the years indicated below. The net wealth assessed includes value of property 365 Harrisganj, Kanpur. The relevant date is as under :
(3.) In appeal, the learned Commissioner (Appeals) took the view that on the original assessment was made, the assessee had disclosed all material facts regarding the existence, status, nature of the property and mode of valuation shown in the return and that simply because the assessee had furnished a valuation report in a subsequent assessment year, the WTO could not have bona fide reason to believe that wealth liable to tax had escaped assessment simply because he felt that there must have been some appreciation in the value of the property as on 15-11-1963 which was the relevant valuation date. He held that the reopening of the assessment was not in accordance with the provisions of section 17(1)(a). The learned Commissioner (Appeals), therefore, quashed the reassessment order. Since the reassessment had been quashed by him, he did not go into the merits of the valuation.;